Question: Are the following statements true or false? Provide simple examples to support your assessment. a. If interest rates rise, bond prices rise. b. If the
b. If the bond's yield to maturity is greater than its coupon rate, the price is greater than the bond's face value.
c. High-coupon bonds of a given maturity sell for lower prices than otherwise identical low-coupon bonds.
d. If interest rates change, the price of a high-coupon bond changes proportionately more than the price of a low-coupon bond of the same maturity and default risk.
e. A investor who owns a 10%, 5-year Canada bond is wealthier if interest rates rise from 4% to 5%.
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a False Since a bonds coupon payments and principal are fixed as interest rates rise the present val... View full answer
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