Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) In the case of a Treasury note or Treasury bond offering, the stop-out yield determines the coupon of the bond and then all bidders pay the discounted value for the bond or note.
• B) All competitive bidders submit sealed bids in terms of yields and the amount of bonds they are willing to purchase.
• C) In the past, the Treasury has issued bonds with maturities of 30 years (often called long bonds) and 20 years.
• D) Noncompetitive bidders (usually individuals) just submit the amount of bonds they wish to purchase and are guaranteed to have their orders filled at the auction.

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Definitions:

Accrual

A method of accounting that records income and expenses when they are earned or incurred, regardless of when the cash transactions occur.

Disclosure

The act of providing essential information or facts, especially those that may influence the decision-making of investors or stakeholders.

Interest Calculations

The process of determining the amount of interest due on a loan or investment based on the principal, rate, and time.

Creditor

A creditor is an entity (person or institution) that lends money or extends credit to another entity, expecting repayment in the future.