Final answer:
The statement is false; the invoice price of a bond includes the quoted price plus any accrued interest. Changes in interest rates affect whether a bond trades at a discount or premium to its face value.
Step-by-step explanation:
The statement that the invoice price of a bond a buyer would pay is equal to the quoted price in the financial press if accrued interest is greater than zero is False. The price of a bond in the financial market is typically listed as the quoted or 'clean' price, which does not include accrued interest. However, when a buyer acquires a bond, they must pay the quoted price plus any accrued interest that has accumulated since the last coupon payment. This total amount is known as the 'dirty' price or invoice price of the bond.
When interest rates change, the bond's price also changes. If the market interest rate rises higher than the bond's coupon rate, its price will drop below face value, making it a discounted bond. Conversely, if the market rate falls below the coupon rate, the bond's price will be above its face value, turning it into a premium bond.