Which one of the following statements is false?
With inflation-linked bonds (unlike normal government bonds with a fixed coupon and fixed par value), the par value is adjusted with inflation at regular intervals. The coupon rate is fixed, but the amount received is adjusted as it is calculated on the inflation-adjusted par value.
Money market instruments are maturing for more than 12 months.
The relationship between interest rates and bond prices is negative.
A yield curve shows the term structure of interest rates for comparable bonds with different maturities.
1 answer
The statement that is false is: "Money market instruments are maturing for more than 12 months." Money market instruments typically have a maturity of one year or less.
1 answer