Which Statement About Interest Rates Is False

question 178

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 forgoing more liquidity.
• E) Long-run interest rates fluctuate more than short-run interest rates.

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Definitions:

Group Cohesiveness

The sense of solidarity and bonding among members of a group, which enhances mutual support, loyalty, and productivity.

Vague Generalities

describes statements or claims that are broad and nonspecific, often used to evade providing concrete details or answers.

Time Management

The process of organizing and planning how to allocate one's time between various activities to effectively achieve goals.

Underestimate

To judge something below its actual value, importance, or strength.