Sensitivity of single cash flow increases with its maturity

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Reference no: EM13943310

Which of the following statements is false?

A) Just as the interest rate sensitivity of a single cash flow increases with its maturity, the interest rate sensitivity of a stream of cash flows increases with its duration.

B) A firm's market capitalization is determined by the difference in the market value of its assets and its liabilities.

C) We can measure a firm's sensitivity to interest rates by computing the duration of its balance sheet.

D) By restructuring the balance sheet to increase its duration, we can hedge the firm's interest rate risk

Reference no: EM13943310

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