Which of the following statements is FALSE?
A) When the prevailing market interest rate is lower than the coupon rate, the bond will be traded at a premium.
B) When the prevailing market interest rate is higher than the coupon rate, the bond will be traded at a discount.
C) The longer the time to maturity, the less sensitive the market price of the bond becomes to changes in prevailing market rates.
D) The higher the coupon rate, the less sensitive the market price of the bond becomes to changes in prevailing market rates.
Correct Answer:
Verified
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