Which of the Following Statements Is Incorrect

question 92

Multiple Choice

Which of the following statements is incorrect?

• A)Standard & Poor's rates commercial paper.
• B)Commercial paper issuers with lower than prime credit ratings are unable to sell commercial paper.
• C)Commercial paper can be sold either directly or indirectly through brokers and dealers.
• D)All of these statements are correct.

---

Definitions:

Risk Premiums

The additional return demanded by investors for taking on higher risk, over and above the risk-free rate of return.

Real Risk-Free Rate

The interest rate on a risk-free asset, after adjusting for inflation, indicating the true return on a risk-free investment.

Inflationary Expectations

Anticipations of future inflation that can influence economic behaviors in the present.

Default Risk Premium

The additional amount a borrower must pay to compensate the lender for assuming the risk that the borrower may default on the loan.