Which of following statements about bonds is NOT true?
A) Bonds have a variable term.
B) The face value of a bond is the amount to be paid at maturity.
C) The maturity of a bond refers to the period over which payments are made.
D) When interest rates rise, the present discounted value of a bond falls.

Question

Quizplus · Accepted Answer

Bonds have a fixed term, not a variable term. The term refers to the length of time until maturity, at which point the face value is paid to the bondholder. The maturity of a bond refers to the period over which payments are made, which can vary depending on the terms of the bond. When interest rates rise, the present discounted value of a bond falls, and this is a key concept in bond pricing.

Which of Following Statements About Bonds Is NOT True