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  3. which of the following statements regarding bonds

Which of the following statements regarding bonds and their terms is FALSE? Question content...

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Finance

Which of the following statements regarding bonds and their terms is FALSE?
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Part 1
A.
The yield to maturity of a bond is the discount rate that sets the future value(FV) of the promised bond payments equal to the current market price of the bond.
B.
Financial professionals also use the term spot interest rates to refer to the defaultminusfree zerominuscoupon yields.
C.
The internal rate of return(IRR) of an investment in a zerominuscoupon bond is the rate of return that investors will earn on their money if they buy a defaultminusfree bond at its current price and hold it to maturity.
D.
When we calculate a bond's yield to maturity by solving the formula,
Price of an nminusperiod bond= StartFraction Coupon Over left parenthesis 1 plus right parenthesis Superscript 1 EndFraction
+ StartFraction Coupon Over left parenthesis 1 plus right parenthesis squared EndFraction
+...+ StartFraction Coupon plus Fac e Over left parenthesis 1 plus right parenthesis Superscript n EndFraction
,
the yield we compute will be a rate per coupon interval.

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