The option-adjusted duration will approximate the time to maturity when Which of the subsequent statements concerning the business cycle is incorrect?

1. interest rates are significantly above the coupon rate because the option has very little chance of being called, and the call option will have very little value.

2. interest rates are significantly below the coupon rate because the option has very little chance of being called, and the call option will have very little value.

3. Once the economy has recovered and current levels of consumption are sustainable, businesses may consider modernizing or expanding, thus stocks of capital goods industries become attractive investments.

4. As the business cycle reaches a peak, inflation rates decrease.

5. None of the above (that is, all are true statements)