Which of the Following Statements Is FALSE

question 78

Multiple Choice

Which of the following statements is FALSE?

• A)Short-term margin loans from a broker are often 1% to 2% lower than the rates paid on short-term Treasury securities.
• B)In the real world,investors have different information and expectations regarding securities.
• C)The SML is still valid when interest rates differ.
• D)When borrowing and lending occur at different rates there are different tangent portfolios identified.

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Definitions:

Accrual

The accounting principle that income and expenses are recognized when they are earned or incurred, regardless of when the cash is actually received or paid.

Net Realisable Value

is the estimated selling price of goods in the ordinary course of business minus the estimated costs of completion and the necessary selling expenses, used in inventory valuation and impairment tests.

Depreciation

A method of allocating the cost of a tangible or physical asset over its useful life, recognizing the asset's wear and tear over time.

Asset's Value

The worth of an asset, which can be determined by factors such as market value, book value, or utility.