Which of the following statements is false?
A) For a given yield and coupon rate, the longer the maturity, the greater the price volatility.
B) Fore a given yield and maturity, price volatility is greater, the higher the coupon rate.
C) A bond's price volatility is affected by its maturity and coupon rate.
D) There is an inverse relationship between the price and yield of a bond.
E) None of the above.

Question

Quizplus · Accepted Answer

For a given yield and maturity, price volatility decreases as the coupon rate increases. Higher coupon rates mean that more of the bond's total return is received before maturity, reducing the bond's sensitivity to interest rate changes.

Which of the Following Statements Is False