QUESTION

24

Which

of the following statements is incorrect?

a.   

The

actual return is higher than the discount rate because the discount rate is

based on the nominal value minus the discount rate.

b.    The y

ield to maturity is the

overall interest rate earned by an investor who buys a bond at the market price

c.    

The

yield of a bond is based on the nominal value less the discount amount.

d.   

A

bond's price moves inversely to its yield to maturity rate.