Which One of the Following Statements Is Not True

question 78

Multiple Choice

Which one of the following statements is not true?

• A)As interest rates increase,bond prices increase.
• B)Interest rate changes and bond prices are inversely related.
• C)Interest rate risk is the risk that bond prices will change as interest rates change.
• D)Long-term bonds are more price volatile than short-term bonds of similar risk.

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Definitions:

Bankruptcy Petition

A formal request filed by an individual or business entity declaring inability to pay outstanding debts, seeking relief through bankruptcy court.

Net Realizable Value

The estimated selling price in the ordinary course of business minus any estimated costs of completion and costs necessary to make the sale.

Statement Of Financial Affairs

A document detailing a company's assets, liabilities, and equity at a specific point in time, often used in bankruptcy proceedings.

Pledged Assets

Pledged assets are those items of value that are pledged as collateral for a loan or obligation, securing the repayment of the loan by providing the lender rights to the collateral in case of default.