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:

United States

A federal republic in North America comprising 50 states and a federal district, known for its democratic governance and diverse population.

Yalta Conference

A meeting held in February 1945, where President Franklin D. Roosevelt, Prime Minister Winston Churchill, and Premier Joseph Stalin discussed Europe's post-war reorganization primarily focusing on the re-establishment of nations conquered by Germany.

Free Elections

The process by which a population chooses its leaders through a system of voting that is open and free from undue influence or coercion.