Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) When we refer to the "risk-free interest rate," we mean the rate on U.S. Treasuries.
• B) Interest rates vary with the investment horizon.
• C) All borrowers, besides the U.S. Treasury, have some risk of default.
• D) When interest on a loan is tax deductible, the effective after-tax interest rate is τ × (1 - r).

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Definitions:

Guesses

Estimations or predictions made without sufficient information or evidence.

Misinformation Effect

The phenomenon whereby memories become distorted by exposure to misleading information after an event has occurred.

Memory Construction

The process by which the brain creates memories, not just by recalling but also by piecing together various fragments of information.

Dynamics

The branch of physics concerned with the study of forces and their effects on motion.