Which of the Following Statements Is False

question 66

Multiple Choice

Which of the following statements is false?

• A) Canadian T-Bill securities are widely regarded to be risk-free because there is virtually no chance the government will default on these bonds.
• B) In general, if the interest rate is r and the tax rate is τ, then for each $1 invested you will earn interest equal to r and owe taxes of τ × r on the interest.
• C) Investors may receive less than the stated interest rate if the borrowing company has financial difficulties and is unable to fully repay the loan.
• D) Taxes reduce the amount of interest the investor can keep, and we refer to this reduced amount as the tax effective interest rate.

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Definitions:

Nonlinear

Describing a process, relation, or equation in which there is not a straight line relationship between variables.

Positive

An attribute or condition that denotes the presence of a particular trait, value, or outcome, typically associated with desirable results.

Moderate

Describes something, such as an opinion, climate, or behavior, that is not extreme or excessive; mild or within reasonable limits.

Cloudy Days

Days characterized by a significant coverage of the sky by clouds, often associated with overcast weather conditions.