Which of the following statements is false?
A) When we refer to the "risk-free interest rate," we mean the rate on Treasury Bills of the Government of Canada.
B) Interest rates vary with the investment horizon.
C) All borrowers, besides the Government of Canada, 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

D) When interest on a loan is tax deductible, the effective after-tax interest rate is r × (1 - τ).

Which of the Following Statements Is False