Which of the Following Statements Is NOT CORRECT

question 55

Multiple Choice

Which of the following statements is NOT CORRECT?

• A)All else equal, secured debt is less risky than unsecured debt.
• B)The expected return on a corporate bond must be less than its promised return if the probability of default is greater than zero.
• C)All else equal, senior debt has less default risk than subordinated debt.
• D)A company's bond rating is affected by its financial ratios and provisions in its indenture.
• E)Under Chapter 11 of the Bankruptcy Act, the assets of a firm that declares bankruptcy must be liquidated, and the sale proceeds must be used to pay off its debt according to the seniority of the debt as spelled out in the Act.

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Definitions:

Revenue Management Tactic

Strategies used by companies to optimize their financial performance by forecasting demand and adjusting prices or availability accordingly.

Sales Pitch

A persuasive speech that aims to convince the audience to buy a product or service by highlighting its benefits.

Revenue Management Tactics

Strategies used to sell the right product to the right customer at the right time for the right price, maximizing revenue.

Negative Perception

An unfavorable or adverse view that individuals or groups hold, often based on experiences or assumptions.