Which of the following statements is FALSE?
A)Prices of bonds with lower durations are more sensitive to interest rate changes.
B)When a bond is trading at a discount,the price increase between coupons will exceed the drop when a coupon is paid,so the bond's price will rise and its discount will decline as time passes.
C)Coupon bonds may trade at a discount,at a premium,or at par.
D)The sensitivity of a bond's price to changes in interest rates is the bond's duration.

Question

Quizplus · Accepted Answer

Bonds with lower durations are less sensitive to interest rate changes, not more sensitive.

Which of the Following Statements Is FALSE