Which of the Following Statements Is FALSE

question 23

Multiple Choice

Which of the following statements is FALSE?

• A)the timing of large stock market swings can often be predicted
• B)changes in stock values tend to affect the value of pensions for many people
• C)rates of return in financial markets feed back into goods markets
• D)asset prices and interest rates are inversely related
• E)many people see stock market volatility as a sign of market efficiency

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Definitions:

Internal Rate Of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value (NPV) of all cash flows from the investment equal to zero.

Discount Factor(s)

A multiplier for determining the present value of future cash flows or other investments, reflecting the time value of money.

Simple Rate Of Return

A method to calculate the profitability of an investment by dividing the annual incremental net operating income by the initial investment cost.

Straight-Line Depreciation

A method of calculating the depreciation of an asset by evenly spreading its cost over its useful life.