Which of the Following Statements Is FALSE

question 74

Multiple Choice

Which of the following statements is FALSE?

• A)Because the cash flows promised by the bond are the most that bondholders can hope to receive,the cash flows that a purchaser of a bond with credit risk expects to receive may be less than that amount.
• B)By consulting bond ratings,investors can assess the credit-worthiness of a particular bond issue.
• C)Because the yield to maturity for a bond is calculated using the promised cash flows,the yield of bonds with credit risk will be lower than that of otherwise identical default-free bonds.
• D)A higher yield to maturity does not necessarily imply that a bond's expected return is higher.

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Definitions:

Southern States

The states in the southeastern and south-central United States, historically known for their agricultural economy and being pro-slavery before the Civil War.

1876

The year marked by significant events such as the centennial of the United States and the disputed presidential election between Rutherford B. Hayes and Samuel J. Tilden.

Freedpeople

Former slaves who were emancipated during and after the American Civil War.

Reconstruction Era

The period from 1865 to 1877 following the Civil War, focused on rebuilding the United States and integrating formerly enslaved people into society.