Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) We can measure a firm's sensitivity to interest rates by computing the duration of its balance sheet.
• B) Just as the interest rate sensitivity of a single cash flow increases with its maturity, the interest rate sensitivity of a stream of cash flows increases with its duration.
• C) By restructuring the balance sheet to increase its duration, we can hedge the firm's interest rate risk.
• D) A firm's market capitalization is determined by the difference in the market value of its assets and its liabilities.

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Definitions:

Alpha Waves

The brain wave pattern associated with deep relaxation.

Delta Waves

Slow brain waves that are present in deep sleep and in brain activities associated with unconsciousness.

EEG

Electroencephalography, a noninvasive method to record electrical activity of the brain used in the diagnosis of neurological disorders, sleep disorders, and for research in neuroscience.

First Stage

In psychology, it refers to the initial phase of a developmental process or therapy, where foundational skills or behaviors are established.