Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)Often,the decision to abandon a project entails costs,which may be either positive or negative.
• B)Mortgage interest rates are higher than Treasury rates because mortgages have an abandonment option that Treasuries do not have: You can prepay your mortgage at any time,while the U.S.government can repay its debt only according to the schedule outlined in the bond contract.
• C)A popular option gives holders of the bond the option to convert the bond into equity.These kinds of bonds are termed callable bonds.
• D)More often than not,there is an opportunity cost of abandoning a project: If you shut down the project and later decide to start it up again,you have to pay the costs of restarting the project.

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Definitions:

Personal Responsibility

The idea that individuals are accountable for their own actions and wellbeing, including taking charge of their life decisions and accepting the consequences.

Pride

A sense of profound contentment that comes from personal accomplishments, the successes of close associates, or from having qualities or belongings that are greatly esteemed.

Shame

A discomforting sensation of shame or upset stemming from an awareness of improper or silly actions.

Inherit

To receive genes from one's parents, or to receive property, titles, debts, rights, or obligations after someone's death.