Question

Which of the following statements is​ false?

A.Prior to its maturity​ date, the price of a zerominus−coupon bond is always greater than its face value.
B.Treasury bills are U.S. government bonds with a maturity of up to one year.
C.The amount of each coupon payment is determined by the coupon rate of the bond.
D.The simplest type of bond is a zerominus−coupon bond.

Answer 1

A zero-coupon bond is sold at a discount to its face value and does not pay any interest or coupon payments.

Step-by-step explanation:

The false statement is A. A zero-coupon bond is a bond that does not pay any interest or coupon payments. It is sold at a discount to its face value and the investor receives the face value at maturity. Therefore, the price of a zero-coupon bond prior to its maturity date is always less than its face value, not greater.