Which Statement About Interest Rates Is False

question 184

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 higher than short-run interest rates.
• C) Long-run bonds tend to be riskier than short-run bonds.
• D) Investors require a higher reward for bonds with more liquidity.
• E) Long-run interest rates fluctuate less than short-run interest rates.

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Definitions:

Office of the Comptroller

The Office of the Comptroller is a government agency responsible for overseeing the execution of government or corporate financial policies and procedures.

Fair Credit Reporting Act

A federal law in the United States designed to protect the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies.

Consumer Credit Report

A document detailing an individual's credit history, used by lenders to assess creditworthiness for loans and credit.

Binding Credit Obligation

A legally enforceable promise or agreement that requires an individual or business to repay borrowed money or fulfill financial commitments.