Which One of the Following Statements Is Incorrect

question 7

Multiple Choice

Which one of the following statements is incorrect?

• A) APR is the true effective annual interest charged by sellers
• B) The Truth in Lending Act regulates interest charges
• C) APR represents the true effective annual rate of interest
• D) None of these

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Definitions:

Leverage

The use of various financial instruments or borrowed capital, such as debt, to increase the potential return of an investment.

Activity

Actions taken or work performed, typically aimed at achieving certain goals or objectives.

Profitability

The ability of a business to earn a profit, which is a financial gain that results when the amount of revenue gained from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Asset Management

The practice of strategically managing company or individual assets to increase value and achieve financial objectives.