Which of the Following Statements Is False

question 14

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 are interest rate forward contracts.
• 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:

Ketone Reduction

A chemical reaction wherein a ketone is reduced to an alcohol, frequently involving the use of a reducing agent.

NaBH4

Sodium borohydride, a reducing agent commonly used in organic chemistry to reduce ketones and aldehydes to alcohols.

Secondary Alcohol

An alcohol containing a hydroxyl group (-OH) attached to a carbon atom that is connected to two other carbon atoms.

Organic Product

Compounds containing carbon atoms, and generally hydrogen atoms, produced from organic reactions involving organic compounds.