Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A)U.S.Treasury securities are widely regarded to be risk-free because there is virtually no chance the government will default on these bonds.
• B)In general,if the interest rate is r and the tax rate is τ,then for each $1 invested you will earn interest equal to r and owe taxes of τ × r on the interest.
• C)Investors may receive less than the stated interest rate if the borrowing company has financial difficulties and is unable to fully repay the loan.
• D)Taxes reduce the amount of interest the investor can keep,and we refer to this reduced amount as the tax effective interest rate.

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Definitions:

Costume Jewelry

Jewelry made from non-precious materials intended for fashion and decorative purposes rather than as an investment or luxury item.

New Cars

Vehicles that have never been previously owned or used, offering the latest technology, features, and warranties directly from the manufacturer or dealership.

Habitual Purchasers

Consumers who buy the same brand or product repeatedly out of habit rather than through active decision-making based on brand comparison.

Coffee Shop

A retail establishment that primarily serves coffee and related beverages, often accompanied by light snacks or pastries, and acting as a social hub or workspace for customers.