All of the Following Are Assumptions of the Industrial Organization

question 48

Multiple Choice

All of the following are assumptions of the industrial organization (I/O) model EXCEPT

• A)organizational decision makers are rational and committed to acting in the firm's best interests.
• B)resources to implement strategies are firm-specific and attached to firms over the long-term.
• C)the external environment is assumed to impose pressures and constraints that determine the strategies that result in above-average returns.
• D)firms in given industries, or given industry segments, are assumed to control similar strategically relevant resources.

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Definitions:

Sinking Fund Bonds

Bonds that include a provision requiring the issuer to set aside funds regularly to repay the bond at maturity.

Principal

The primary amount of a loan or investment, excluding interest or profits.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Maturity

The point in time when a financial instrument or obligation, such as a bond or loan, becomes due and payment is required.