Which of the Statements Below Is FALSE

question 47

Multiple Choice

Which of the statements below is FALSE?

• A)If you invest money for a short period and buy a six-month CD,you will not receive as high an interest rate as if you bought a CD with a longer maturity period.
• B)The difference in rates as the borrowing time or investment horizon increases is due to the maturity premium of the investments.
• C)The maturity premium represents that portion of the yield that compensates the investor for the additional waiting time or the lender for the additional time it takes to receive repayment in full.
• D)The longer the loan,the greater the risk of nonpayment and the lower the interest rate the lender demands.

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Definitions:

Solvency Ratios

Measures of the ability of the company to survive over a long period of time.

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, assets, equity, and other factors.

Comprehensive Income

Represents the total change in equity for a business enterprise during a period from transactions and other events from non-owner sources.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in value, but has not actually been sold yet.