Which of the Following Statements Is FALSE

question 57

Multiple Choice

Which of the following statements is FALSE?

• A)There are two potential sources of cash flows from owning a stock.
• B)An investor will be willing to pay a price today for a share of stock up to the point that this transaction has a zero NPV.
• C)An investor might generate cash by choosing to sell the shares at some future date.
• D)Because the cash flows from stock are known with certainty,we can discount them using the risk-free interest rate.

---

Definitions:

Boycott

An organized refusal to buy, use, or engage with a company, country, or product as a form of protest.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, not based on cost differences but on consumers' willingness to pay.

Preference in Pricing

A practice where certain customers are offered better prices or terms than others, often based on the volume of business, loyalty, or strategic importance.

Clayton Act

A U.S. antitrust law aimed at promoting competition among businesses by prohibiting certain practices that restrict commerce.