Which of the Below Statements Is FALSE

question 33

Multiple Choice

Which of the below statements is FALSE?

• A) Government broker-dealers are not required to disclose the bid-ask spread on the Treasury securities that they buy from or sell to customers.
• B) In the repo market, the term of the loan and the interest rate that the dealer agrees to pay (called the repo rate) are specified.
• C) The advantage to the dealer of using the repo market for borrowing on a short-term basis is that the rate is greater than the cost of bank financing.
• D) There is no one repo rate; rates vary from transaction to transaction depending on factors such as the term of the repo and the availability of collateral.

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Definitions:

Pro Forma Statement

A financial statement based on hypothetical scenarios or future projections, used for planning purposes.

Sustainable Rate

A concept in environmental and economic policy referring to the level of growth or extraction that can be maintained long term without depleting resources or causing severe ecological damage.

Capacity

Refers to the maximum amount that something can contain or produce, often used in the context of production and manufacturing capabilities.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without needing to increase its financial leverage or equity financing, based on its current profitability, asset utilization, dividend policy, and debt/equity ratio.