Which of the Following Statements Is FALSE

question 43

Multiple Choice

Which of the following statements is FALSE?

• A)The investor's opportunity cost of capital is the best available expected return offered in the market on an investment of comparable risk and term of the cash flows being discounted.
• B)Interest rates we observe in the market will vary based on quoting conventions,the term of investment,and risk.
• C)The opportunity cost of capital is the return the investor forgoes when the investor takes on a new investment.
• D)For a risk-free project,the opportunity cost of capital will typically be greater than the interest rate of U.S.Treasury securities with a similar term.

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Definitions:

Surplus of Electrons

A condition where there are more electrons than protons in a system, leading to a negative charge.

Ohmmeter

An instrument for measuring electrical resistance in ohms, used in diagnosing and troubleshooting electrical problems.

Electrical Circuit

A pathway formed by conducting materials through which electric current flows.

Magnetic Lines of Flux

Imaginary lines used to represent the strength and direction of a magnetic field, flowing from the north to the south pole.