Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)FV =
• B)PV =
• C)FV = C_n × (1 + r)ⁿ
• D)Most investment opportunities have multiple cash flows that occur at different points in time.

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Definitions:

Legal Reserve Requirement

A regulation set by central banks determining the minimum amount of reserves that must be held by a financial institution, usually a percentage of deposits.

Federal Funds Rate

The interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposit account liabilities, as mandated by the central bank, to ensure bank liquidity.

Demand Deposits

Bank accounts that allow the holder to withdraw funds without advance notice, such as checking accounts.