Which of the Following Statements Is False

question 1

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 provincial 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:

Transitory Components

Elements affecting financial statements or economic conditions that are expected to be temporary and not indicative of ongoing future performance.

Value-Irrelevant

Financial information or factors that do not impact an investor's or decision maker's assessment of a company's value.

Reported Earnings

The net income that a company reports to its investors and shareholders, often found on its income statement.

Abnormal Earnings

Profits that exceed or fall short of the expected normal return for a given year or period.