What is meant by default correlation?
What will be an ideal response?
For a portfolio of corporate bonds, there is the risk that some event that triggers the default of one of the corporate bonds in the portfolio will adversely impact another corporate bond in the portfolio, thereby increasing the probability of the default of that second corporation. A commonly used statistical concept to gauge the dependence between two variables is correlation. In credit risk management, this type of risk is referred to as default correlation. One would expect that for corporate issuers in the same industry sector, default correlation is high.
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________ are the most common type of sales promotion.
Fill in the blank(s) with the appropriate word(s).
Which of the following provides the information needed to confirm insights and hypotheses and help managers pursue appropriate courses of action?
A. qualitative research B. in-depth interviews C. quantitative research D. observation research E. social media monitoring
In applying the "foreign substance/natural substance" liability test in the sale of food or drink, some courts refuse to impose warranty liability if the thing in the food that caused the harm was naturally present.?
Indicate whether the statement is true or false
Turk Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows:End ofYearMachine?AB1$5,000 $1,000 2 4,000 2,000 3 2,000 11,000 Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Turk purchase?
A. Both machines are acceptable, but A should be selected because it has the greater net present value. B. Both machines are acceptable, but B should be selected because it has the greater net present value. C. Neither machine is acceptable. D. Only Machine A is acceptable. E. Only Machine B is acceptable.