Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) The plot of the relationship between the investment risk and the interest rate is call the yield curve.
• B) Each of the previous recessions in Canada was preceded by a period with an inverted yield curve.
• C) The nominal interest rate does not represent the increase in purchasing power that will result from investing.
• D) A risk-free cash flow received in two years should be discounted at the two-year interest rate.

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Definitions:

Gross Profit

This is the financial gain made after subtracting the cost of goods sold from the revenue generated from sales, before deducting any operational expenses.

Sales Revenue

The total income generated from the sale of goods or services before any costs or expenses are deducted.

Costs Of Goods Sold

An accounting term that denotes the direct costs attributable to the production of the goods sold by a company.

Break-even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and a key financial analysis metric for businesses.