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.

Understand the relationship between consumption and after-tax income.

Comprehend the concept of direct and inverse relationships between two variables.

Learn how changes in interest rates affect business investment in machinery and equipment.

Understand how to interpret and construct equations and graphs from given data sets.

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