One of the following statements below is incorrect. Which one? (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
E) All of the above statements are correct.
F) None of the above statements are correct

Question

Quizplus · Accepted Answer

Convertible bonds typically have lower yields compared to non-convertible bonds because they offer the additional value of conversion to equity, which is an attractive feature to investors.

One of the Following Statements Below Is Incorrect