Which of the Following Statements Is False

question 12

Multiple Choice

Which of the following statements is false?

• A) Financial transactions are not sources of value, but merely serve to adjust the timing and risk of the cash flows to best suit the needs of the firm or its investors.
• B) The NPV of trading a security in a normal market is zero.
• C) We cannot separate a firm's investment decision from the decision of how to finance the investment.
• D) In normal markets, trading securities neither creates nor destroys value.

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Definitions:

Federal Law

Laws enacted by the national government of a country, which are supreme over state laws within its constitutional powers and apply to citizens and residents throughout the country.

Arbitrator's Decision

A final decision made by an arbitrator, who is a neutral third party, to resolve a dispute outside of court.

National Labor Relations Act

A foundational statute of US labor law which guarantees the rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Strikes

Work stoppages initiated by employees to protest against poor working conditions, low pay, or other labor issues.