Which of the following statements is FALSE?
A)The actual return kept by an investor will depend on how the interest is taxed.
B)The equivalent after-tax interest rate is r(1 - τ).
C)The highest interest rate,for a given horizon,is the rate paid on U.S.Treasury securities.
D)It is important to use a discount rate that matches both the horizon and the risk of the cash flows.

Question

Quizplus · Accepted Answer

This statement is false because the highest interest rate for a given horizon is not always the rate paid on U.S. Treasury securities. Different types of bonds and investments offer varying interest rates, and the highest rate may be found in other options.

Which of the Following Statements Is FALSE