Which of the Following Statements Is FALSE

question 105

Multiple Choice

Which of the following statements is FALSE?

• A)Forward rates tend not to be good predictors of future spot rates.
• B)Given the risk associated with interest rate changes,corporate managers require tools to help manage this risk.
• C)One of the most important tools to manage the risk of interest rate changes are interest rate forward contracts.
• D)A spot rate is an interest rate that we can guarantee today for a loan or investment that will occur in the future.

---

Definitions:

Credit Item

An entry that increases the balance of a firm's or individual's account in financial statements.

Balance of Payments

A record of all financial transactions made between a country and the rest of the world over a specific period.

Debit

A financial record that leads to a rise in assets or a reduction in liabilities on a corporation's balance sheet.

Balance of Payments

The balance of payments is a comprehensive record of a country's economic transactions with the rest of the world, including trade, investments, and financial transfers, over a specific time period.