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Which of the Following Statements Below Is Incorrect? (Consider Each

Question 77

Multiple Choice

Which of the following statements below is incorrect? (Consider each statement by itself without reference to the other statements.)


A) Security A has the same maturity, default risk and tax status as Security B but is more marketable than B; thus, Security A should carry a lower yield
B) Securities A and B are new corporate bonds issued today and have comparable maturities and risk levels, but A has a 10-year call deferment and B a 5-year deferment; thus, Security A should carry a lower yield
C) Securities A and B are new corporate bonds issued today with comparable maturities and risk levels, but A is convertible and B is not; Security A should carry a higher yield
D) Security A is an AA-rated municipal bond, while Security B, having the same maturity and AA rating, is a corporate bond; thus, security A should have the lower yield

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