Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)In the case of a Treasury note or Treasury bond offering,the stop-out yield determines the coupon of the bond and then all bidders pay the discounted value for the bond or note.
• B)All competitive bidders submit sealed bids in terms of yields and the amount of bonds they are willing to purchase.
• C)In the past,the Treasury has issued bonds (often called long bonds)with maturities of 30 years and 20 years.
• D)Noncompetitive bidders (usually individuals)just submit the amount of bonds they wish to purchase and are guaranteed to have their orders filled at the auction.

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Definitions:

Invested Funds

Money placed into vehicles like stocks, bonds, or mutual funds with the expectation of earning a return.

Cost Of Capital

The return rate that a company must earn on an investment to maintain its market value and attract funds.

Cash Flows

The complete sum of financial resources being exchanged within a business, profoundly impacting its immediate financial health.

Component Cost Of Debt

The effective rate that a company pays on its current debt, incorporating both interest rates and other costs associated with borrowing.