Which of the following statements is false?
A) As the price paid for a bond rises,the yield declines.
B) If you purchase stock from an individual that currently owns the stock,you are buying it in the secondary market.
C) The yield on a bond is another term for the coupon rate on a bond.
D) A rating of Aaa from Moody's is the highest bond rating given by that rating agency.

Question

Quizplus · Accepted Answer

The yield on a bond is not the same as the coupon rate on a bond. The yield reflects the return on investment based on the current market price of the bond, while the coupon rate is the fixed interest rate stated on the bond at the time of issuance.

Which of the Following Statements Is False