Which of the following statements is FALSE?
A)When we refer to the "risk-free interest rate," we mean the rate on U.S.Treasuries.
B)Interest rates vary with the investment horizon.
C)All borrowers,besides the U.S.Treasury,have some risk of default.
D)When interest on a loan is tax deductible,the effective after-tax interest rate is τ × (1 - r).

Question

Quizplus · Accepted Answer

The correct formula for the effective after-tax interest rate is r × (1 - τ), where r is the interest rate and τ is the tax rate.

Which of the Following Statements Is FALSE