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Suppose You Are Trying to Price a Bond

Question 337

Multiple Choice

Suppose you are trying to price a bond. Which of the following is false?


A) The lower the discount rate, the more valuable the coupon payments are today.
B) Bonds with high coupon payments are generally (all else the same) more sensitive to changes in interest rates than bonds with lower coupon payments.
C) When market interest rates rise, bond prices will fall, all else the same.
D) Bonds with long maturities are generally (all else the same) more sensitive to changes in interest rates than bonds with shorter maturities.
E) All else the same, bonds with larger coupon payments will have a higher price today.

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