Which statements about zero coupon bonds is not true

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Problem 1: Which of the following statements about zero coupon bonds is NOT true?

A.U.S. Treasury bills and saving bonds are example of zero coupon bonds.

B.When a bond is "stripped," it is split into two parts; the principal and the coupons, or "residue."

C.Zero coupon bonds are particularly popular with pension and insurance companies.

D.The impact of interest rate fluctuations on zero coupon bonds is higher than for coupon bonds.

Problem 2: Which of the following factors influence the reinvestment risk associated with a bond?

A.The market interest rate.

B.The maturity of the bond.

C.The interest rate of the bond.

D.All of these answers.

Reference no: EM132869227

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