Which of the following statements is false?
A) Given the spot interest rates, we can determine the price and yield of any other default-free bond.
B) As the coupon increases, earlier cash flows become relatively less important than later cash flows in the calculation of the present value.
C) When the yield curve is flat, all zero-coupon and coupon-paying bonds will have the same yield, independent of their maturities and coupon rates.
D) When U.S. bond traders refer to "the yield curve," they are often referring to the coupon-paying Treasury yield curve.

Question

Quizplus · Accepted Answer

As the coupon increases, earlier cash flows become relatively more important than later cash flows in the calculation of the present value, not less important.

Which of the Following Statements Is False