Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)The relationship between the investment term and the interest rate is called the term structure of interest rates.
• B)Real interest rates indicate the rate at which your money will grow if invested for a certain period.
• C)The yield curve is a potential leading indicator of future economic growth.
• D)The shape of the yield curve will be strongly influenced by interest rate expectations.

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Definitions:

Promissory Note

An economic tool comprising a formal pledge by one entity to give a specific amount of money to another, either upon request or at a predetermined future time.

Term Deposit

A type of financial account where money is deposited for a fixed period and a predetermined interest rate, offering higher interest rates than savings accounts but with restricted access to funds.

Simple Interest

A technique for computing interest in which the interest expense is calculated solely on the initial amount of the principal.

Maturity Value

The total amount that will be paid to the investor at the end of a fixed-term investment, including the principal and any accrued interest.