Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)We can measure a firm's sensitivity to interest rates by computing the duration of its balance sheet.
• B)Just as the interest rate sensitivity of a single cash flow increases with its maturity,the interest rate sensitivity of a stream of cash flows increases with its duration.
• C)By restructuring the balance sheet to increase its duration,we can hedge the firm's interest rate risk.
• D)A firm's market capitalization is determined by the difference in the market value of its assets and its liabilities.

---

Definitions:

Extended Families

A family structure that includes not just parents and children but also other relatives such as grandparents, aunts, uncles, and cousins.

Nuclear Families

A family unit consisting of two parents and their children living together as a single household.

Single Parent

A parent who is not living with a spouse or partner and bears most of the day-to-day responsibilities of raising a child or children.

Alcoholism

A chronic disease characterized by an uncontrollable desire to consume alcohol despite adverse effects on health, relationships, and social functioning.