Which of the Following Statements Is FALSE

question 60

Multiple Choice

Which of the following statements is FALSE?

• A) The bond's expected return, which is equal to the firm's debt cost of capital, is less than the yield to maturity if there is a risk of default.
• B) The two best-known bond-rating companies are Standard & Poor's and Dow Jones.
• C) Bonds in the bottom five categories are often call speculative bonds, junk bonds, or high-yield bonds.
• D) Bond ratings encourage widespread investor participation and relatively liquid markets.

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Definitions:

Z Score

A calculation used to express the difference of a particular value from a group's mean, in terms of how many standard deviations away it is.

T Score

A standardized score that indicates how many standard deviations an element is from the mean of its distribution.

Z Scores

Standard scores indicating how many standard deviations an element is from the mean.

Combinations

The selection of items from a larger set where order does not matter.