Which of the Following Statements Is False

Which of the following statements is false?

A) Often, the decision to abandon a project entails costs, which may be either positive or negative.
B) Mortgage interest rates are higher than Treasury rates because mortgages have an abandonment option that Treasuries do not have; you can prepay your mortgage at any time, while the Canadian government can repay its debt only according to the schedule outlined in the bond contract.
C) A popular option gives holders of the bond the option to convert the bond into equity. These kinds of bonds are termed callable bonds.
D) More often than not, there is an opportunity cost of abandoning a project: if you shut down the project and later decide to start it up again, you have to pay the costs of restarting the project.

Correct Answer:

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