Which of the Following Statements Is False

question 11

Multiple Choice

Which of the following statements is false?

• A) Forward rates tend not to be good predictors of future spot rates.
• B) Given the risk associated with interest rate changes, corporate managers require tools to help manage this risk.
• C) One of the most important tools to manage the risk of interest rate changes is the interest rate forward contract.
• D) A spot rate is an interest rate that we can guarantee today for a loan or investment that will occur in the future.

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Definitions:

Informative

Providing useful or important information or details.

Assumptions

Statements or ideas accepted as true without proof, used as the basis for reasoning or argumentation.

Explanandum

The phenomenon or event that is to be explained, often used in the context of scientific inquiry.

Hypothesis

A proposed explanation for a phenomenon, often based on limited evidence as a starting point for further investigation.