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:

Selling Price

The amount for which a product is sold to the customer, determining the revenue generated from sales.

Financial Advantage

The benefit gained in financial terms, often through investment decisions, operational improvements, or strategic actions.

Calculators

Electronic devices or software applications used for making mathematical calculations, ranging from basic arithmetic to complex computations.

Upgrading

The process of improving or enhancing a system, equipment, or software to boost performance or capabilities.