Which of the Following Statements Is False

question 30

Multiple Choice

Which of the following statements is false?

• A) Almost all bonds that are issued today are registered bonds.
• B) The trust company represents the bondholders and makes sure that the terms of the indenture are enforced.
• C) For private placements, the prospectus must include an indenture, a formal contract between the bond issuer and a trust company.
• D) In the case of default, the trust company represents the bondholders' interests.

---

Definitions:

Construct Validity

The extent to which a test measures what it claims, or is supposed to measure, within theoretical frameworks.

Reverse Causality

A situation where the supposed effect influences the cause, challenging the traditional direction of causation.

Confound

A variable that mistakenly appears to cause the observed effect but in reality is associated with both the supposed cause and effect, thus misleading the interpretation.

Temporal Order

The sequence in which events occur in time.