Which of the following statements is NOT correct?
A)Bond prices and interest rates move in opposite directions.
B)Coupon rates are fixed for the life of the bond.
C)A bond's price is equal to the present value of its future cashflows.
D)The coupon rate affects a bond price through the discounting factor.

Question

Quizplus · Accepted Answer

The coupon rate does not affect the bond price through the discounting factor; instead, the discount rate, which reflects the market interest rate, is used to discount the bond's future cash flows to determine its price.

Which of the Following Statements Is NOT Correct