Which of the Following Statements Is False

question 29

Multiple Choice

Which of the following statements is false?

• A) We can measure a firm's sensitivity to interest rates by computing the duration of its balance sheet.
• B) A firm's market capitalization is determined by the difference in the market value of its assets and its liabilities.
• C) By restructuring the balance sheet to increase its duration, we can hedge the firm's interest rate risk.
• D) All of the above are true.

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