Which of the Following Statements Is Incorrect

question 54

Multiple Choice

Which of the following statements is incorrect?

• A) A municipal bond must pay a risk premium to compensate for the possibility of default risk.
• B) A Treasury bond must pay a slight premium to compensate for being less liquid than municipal bonds.
• C) The income earned from municipal bonds is exempt from federal taxes.
• D) All of the above are true.

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Definitions:

Internal Control

Processes and procedures implemented within an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Operations Efficiency

A measure of how well a company uses its resources to produce output effectively.

Cash Control

Methods and procedures that a company uses to monitor, manage, and protect its cash transactions and balances.

Large Companies

Businesses characterized by significant revenue, extensive operational scales, or substantial numbers of employees, often having considerable influence in their respective markets.