Which of the following statements is FALSE?
A)The IRR of an investment in a zero-coupon bond is the rate of return that investors will earn on their money if they buy a default free bond at its current price and hold it to maturity.
B)The yield to maturity of a bond is the discount rate that sets the future value of the promised bond payments equal to the current market price of the bond.
C)Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields.
D)When we calculate a bond's yield to maturity by solving the formula,Price of an n-period bond = + + ...+ ,the yield we compute will be a rate per coupon interval.

Question

Which of the following statements is FALSE?
A)The IRR of an investment in a zero-coupon bond is the rate of return that investors will earn on their money if they buy a default free bond at its current price and hold it to maturity. 
B)The yield to maturity of a bond is the discount rate that sets the future value of the promised bond payments equal to the current market price of the bond. 
C)Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields. 
D)When we calculate a bond's yield to maturity by solving the formula,Price of an n-period bond = + + ...+ ,the yield we compute will be a rate per coupon interval.

Quizplus · Accepted Answer

The Answer of Which of the following statements is FALSE?
A)The IRR of an investment in a zero-coupon bond is the rate of return that investors will earn on their money if they buy a default free bond at its current price and hold it to maturity. 
B)The yield to maturity of a bond is the discount rate that sets the future value of the promised bond payments equal to the current market price of the bond. 
C)Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields. 
D)When we calculate a bond's yield to maturity by solving the formula,Price of an n-period bond = + + ...+ ,the yield we compute will be a rate per coupon interval.

Which of the Following Statements Is FALSE