Which of the Below Statements Is FALSE

question 14

Multiple Choice

Which of the below statements is FALSE?

• A) The spread between Treasury securities and non-Treasury securities that are identical in all respects except for credit quality is referred to as a credit spread.
• B) The spread between any two maturity sectors of the market is called a maturity spread or yield curve spread.
• C) An option that is included in a bond issue is referred to as a prepayment option.
• D) The most common type of option in a bond issue is a call provision.

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Definitions:

Basic Principles

Fundamental theories or beliefs that form the foundation for a system of belief or behavior or for a chain of reasoning.

Contract Law

The body of law that governs the formation, execution, and enforcement of contracts between parties.

Insurance Policies

Contracts between an insurer and a policyholder that provide financial protection and compensation for specific losses in return for premiums paid.

Valued Policy

A type of insurance policy where the value of the insured item is agreed upon at the time the policy is issued, and this amount is paid out in the event of a total loss.