The risk that the party on the other side of a financial transaction fails to meet its obligation is called
A) credit risk.
B) currency risk.
C) counterparty risk.
D) leverage.
C
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Demand curves often do not remain stationary; they shift because of changes in other variables.
Answer the following statement true (T) or false (F)
All of the following can cause conflict between divisions EXCEPT
a. Coordination between divisions does not benefit all divisions equally b. managers of cost centers care too little about enhancing revenues c. managers are rewarded only for actions that profit their own division generates, regardless of the effects on other divisions d. corporate executives cannot tell when one divisional manager's decisions are appropriate or not
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. At the end of the day, Tom could have:
A. (16 dishes, 4 fences) or (8 dishes, 2 fences). B. (8 dishes, 2 fences), or (4 dishes, 6 fences). C. (8 dishes, 2 fences), or (4 dishes, 3 fences). D. (12 dishes, 3 fences), or (8 dishes, 3 fences).
New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called “bandit barriers.” The police were surprised the bank did not take their advice. According to a deputy commissioner of police, “Commerce does very little of what we recommend. They’ve told our detectives they have no interest in ever putting in the barriers.” It would seem that Commerce Bank would have a strong incentive to install “bandit barriers” to deter robberies. Why wouldn’t they do it?
a. The banks probably resent any interference from the police department. b. The banks are concerned that “bandit barriers” would send the wrong message to customers—that the bank is unsafe. c. The banks must have weighed the cost of installing bandit barriers against the bene ts and decided that they have “no interest in ever putting in the barriers.” d. The banks would rather delay the installation of any theft deterring equipment in anticipation of new lower-cost innovations in the security devices market.