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.

---

Definitions:

Government Workers

Employees who are employed in the public sector, working for government entities at various levels.

Businesses

Entities engaged in commercial, industrial, or professional activities, aiming to generate profits from the goods or services they offer.

Craft Union

Labor union whose members all have a particular skill or occupation.

Bargaining Power

The capacity of one party in a negotiation to influence the terms of an agreement or the balance of power between negotiating parties.