Which Statement About Interest Rates Is False

question 48

Multiple Choice

Which statement about interest rates is false?

• A) The prime rate equals the overnight rate plus 2 percent.
• B) Long-run interest rates tend to be lower than short-run interest rates.
• C) Long-run bonds tend to be riskier than short-run bonds.
• D) Investors require a higher reward for forgoing more liquidity.
• E) Long-run interest rates fluctuate less than short-run interest rates.

---

Definitions:

Intellectual Equality

The notion that individuals should be recognized as having equal intellectual potential irrespective of their background.

Direct Regulation

Direct Regulation refers to government rules or laws that directly dictate the conduct of individuals, businesses, and other organizations within a society.

Licensing

the process by which an individual or business is granted permission to perform certain activities or use certain properties under agreed terms.

NFPA

An abbreviation for the National Fire Protection Association, an organization that creates codes and standards for fire safety and prevention.