Which of the Following Statements Is False

question 90

Multiple Choice

Which of the following statements is false?

• A) Because the cash flows promised by the bond are the most that bondholders can hope to receive, the cash flows that a purchaser of a bond with credit risk expects to receive may be less than that amount.
• B) By consulting bond ratings, investors can assess the credit-worthiness of a particular bond issue.
• C) Because the yield to maturity for a bond is calculated using the promised cash flows, the yield of bonds with credit risk will be lower than that of otherwise identical default-free bonds.
• D) A higher yield to maturity does not necessarily imply that a bond's expected return is higher.

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Definitions:

Competitors' Prices

Refers to the pricing information of similar products or services offered by companies competing in the same market.

Activity Cost Pool

A grouping of all costs associated with a particular activity, used in activity-based costing to allocate costs more accurately.

Machining

A manufacturing process that involves cutting, shaping, or removing material from a workpiece to create a desired part.

Machine Set Up

The process of configuring and preparing a machine for a specific production task or operation.