Which of the following statements regarding bonds and their terms is FALSE?
A) Zero-coupon bonds are also called pure discount bonds.
B) The internal rate of return (IRR) of an investment opportunity is the discount rate at which the net present value (NPV) of the investment opportunity is equal to zero.
C) The yield to maturity for a zero-coupon bond is the return you will earn as an investor from holding the bond to maturity and receiving the promised face value payment.
D) When prices are quoted in the bond market, they are conventionally quoted in increments of $1,000.

Question

Quizplus · Accepted Answer

Bond prices in the market are typically quoted as a percentage of their face value, not in increments of $1,000. This means that a bond price quoted at 100 represents 100% of its face value, not $1,000.

Which of the Following Statements Regarding Bonds and Their Terms