Final answer:
The statement that the longer the maturity date of the bond, the higher the YTM is false.
Step-by-step explanation:
False, The statement that the longer the maturity date of the bond, the higher the YTM is false. Yield to Maturity (YTM) is the total return anticipated on a bond if it is held until it matures. YTM is affected by various factors, including the interest rate, coupon rate, and the price of the bond. Generally, when interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. Therefore, if interest rates increase in the future, a holder of a long-term bond with a higher yield will be more affected by the price decline compared to a holder of a short-term bond. This means that the longer the time until maturity, the greater the price risk associated with changes in interest rates, but it does not necessarily imply a higher YTM.