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:

Legal Issues

Matters governed by the law that require legal understanding, interpretation, or resolution.

Client Information

Data related to clients, such as personal and contact details, that is collected and maintained by a business or professional.

Requisite Elements

Essential components or conditions required for a certain status, action, or process to be considered valid or complete.

Fraud

Fraud is a deliberate deception practiced to secure unfair or unlawful gain, often at the expense of others.