Which of the Below Statements Is FALSE

question 55

Multiple Choice

Which of the below statements is FALSE?

• A) The buyer of an FRA benefits if the reference rate increases and the seller benefits if the reference rate decreases.
• B) In a futures contract, the buyer benefits from a rising rate while the seller benefits from a falling rate.
• C) In the case of an FRA, the underlying is a rate with the buyer gaining if the rate increases and losing if the rate decreases.
• D) In a futures contract the underlying is a fixed-income instrument.

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Definitions:

Level of Significance

The probability threshold under which the null hypothesis is rejected in hypothesis testing, denoted as alpha.

Null Hypothesis

A default position that there is no difference or effect in a particular situation, used as a starting point for statistical hypothesis testing.

Number of Groups

The total count of distinct categories or clusters into which a set of observations or data points are classified.

Cramér's V

A measure of association between two nominal variables, giving a value between 0 and 1 to indicate the strength of the association.