Which of the Following Statements Is False

question 50

Multiple Choice

Which of the following statements is false?

• A) In general, the expected future spot interest rate will reflect investor's preferences toward the risk of future interest rate fluctuations.
• B) If investors did not care about risk, then they would be indifferent between investing in a two-year bond and investing in a one-year bond and rolling over the money in one-year.
• C) When we refer to the one-year forward rate for year 5, we mean the rate available today on a one-year investment that begins four years from today and is repaid five years from today.
• D) In general, we can compute the forward rate for year n by comparing an investment in an n-year, zero-coupon bond to an investment in an (n + 1)-year, zero-coupon bond, with the interest rate earned in the nth year being guaranteed through an interest rate forward contract.

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Definitions:

Qualify An Account

Qualifying an account involves determining whether a potential customer meets the criteria to be considered a viable prospect for sales or service.

Credit Standards

The set of criteria that lenders use to determine the creditworthiness of an applicant, affecting whether credit will be extended and under what terms.

Strict Formal Routing

A rigid and precisely defined path or procedure that must be followed in processes or communications within an organization.

Territory Coverage

The strategic allocation of sales or service resources to different geographical areas to maximize market reach and efficiency.