Which of the Following Is Not an Assumption of the EOQ

question 38

Multiple Choice

Which of the following is not an assumption of the EOQ with planned shortages model?

• A)There are no backorders.
• B)Demand rate is constant.
• C)There are no quantity discounts.
• D)Lead time is constant.

---

Definitions:

Long-Duration Bonds

Bonds with a long time remaining until maturity, typically more sensitive to interest rate changes and offering potentially higher yields.

Zero-Coupon Bond

A debt security that does not pay interest but is traded at a deep discount, offering profit at maturity when it reaches face value.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, typically expressed in years.

Bond Convexity

A measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, demonstrating how the duration of a bond changes as the interest rate changes.