The primary risk associated with a short-term investment is
A) purchasing power risk.
B) default risk.
C) interest rate risk.
D) economic risk.
Answer: A
You might also like to view...
Lito works for a business that is part of a large corporation with many diverse business lines that operate autonomously. Lito’s group designs and manufactures playground equipment, but the corporation also owns asphalt paving companies, a producer of modular housing, a small amusement park, and a real estate firm. Given this, it seems likely that the parent corporation that owns this diverse portfolio of businesses uses a ______ structure.
a. matrix b. divisional c. conglomerate d. modular
For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product. ?Product or period cost?Direct or indirect cost?Cost itemProductPeriodDirectIndirect Administrative salaries???? Direct labor???? Advertising???? Property tax on the factory???? Factory maintenance???? Direct materials???? Depreciation on factory equipment???? Interest expense???? Factory supplies????
What will be an ideal response?
In using a moving average forecasting technique, as the number of averaging period, k, increases:
A) the forecast will respond more quickly to recent changes in the data B) the forecast will be more accurate especially if the data exhibits a trend C) the moving average will increase in value D) the moving average approximates the weighted moving average E) the moving average will smooth out variations
A portfolio manager enters into a total return swap. She swaps 50% of her $50 million index based portfolio for 4.5% yield bonds. If the annualized total return on the index is 2.5%, what net cash flow will the manager experience under the swap agreement?
A) + $250,000 B) -$250,000 C) + $500,000 D) -$500,000