Which of the following statements is false?
A) We can use the law of one price to compute the price of a coupon bond from the prices of zero-coupon bonds.
B) The plot of the yields of coupon bonds of different maturities is called the coupon-paying yield curve.
C) It is possible to replicate the cash flows of a coupon bond using zero-coupon bonds.
D) Because the coupon bond provides cash flows at different points in time, the yield to maturity of a coupon bond is the simple average of the yields of the zero-coupon bonds of equal and shorter maturities.

Question

Quizplus · Accepted Answer

D) Because the coupon bond provides cash flows at different points in time, the yield to maturity of a coupon bond is the weighted average of the yields of the zero-coupon bonds of equal and shorter maturities.

Which of the Following Statements Is False