Which of the Following Statements Is FALSE

question 29

Multiple Choice

Which of the following statements is FALSE?

• A) We can access a firm's sensitivity to interest rates by examining its balance sheet.
• B) Just as the interest rate sensitivity of a single cash flow increases with its maturity, the interest rate sensitivity of a stream of cash flows increases with its duration.
• C) By restructuring the balance sheet to increase its duration, we can hedge the firm's interest rate risk.
• D) A firm's market capitalization is determined by the difference in the market value of its assets and its liabilities.

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Definitions:

Process Controls

Mechanisms or procedures put in place within an organization to guide, monitor, and regulate ongoing processes to ensure they meet desired standards and objectives.

Maintenance Function

An activity essential to effective, satisfying interpersonal relationships within a team or group.

Harmonizing Conflict

involves the process of resolving disputes and differences in a manner that promotes unity and cooperation among parties involved.

Evaluating Effectiveness

The process of assessing how well a plan, program, or project achieves its objectives and desired outcomes.