Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)Zero-coupon Treasury securities with maturities longer than one year also trade in the bond market.
• B)Treasury securities are initially sold to the public through dealers.
• C)Municipal bonds ("munis")are issued by state and local governments.
• D)Municipal bonds' distinguishing characteristic is that the income on municipal bonds is not taxable at the federal level.

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Definitions:

Business Risk

The potential for loss or failure in the operation of a company, often due to external and internal factors.

Financial Assets

Assets that derive value because of a contractual claim on them, such as stocks, bonds, bank deposits, and other investments.

Non-Financial Assets

Assets that are not in the form of cash or cannot be easily converted to cash, such as property, plant, and equipment.

Risk-Free Assets

Investments that are considered to carry no risk of financial loss, typically represented by government bonds or treasury bills.