Which of the following statements is FALSE?
A)Given the spot interest rates,we can determine the price and yield of any other default-free bond.
B)As the coupon increases,earlier cash flows become relatively less important than later cash flows in the calculation of the present value.
C)When the yield curve is flat,all zero-coupon and coupon-paying bonds will have the same yield,independent of their maturities and coupon rates.
D)When U.S.bond traders refer to "the yield curve," they are often referring to the coupon-paying Treasury yield curve.

Question

Quizplus · Accepted Answer

As the coupon increases, earlier cash flows become more important, not less, because they are larger and thus have a greater impact on the present value calculation.

Which of the Following Statements Is FALSE