The Cost of Servicing the Debt May Increase If

question 70

Multiple Choice

The cost of servicing the debt may increase if

• A)The debt shrinks.
• B)Deficits become smaller.
• C)Interest rates rise.
• D)The debt is held internally.

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Definitions:

Realized Gain

is the profit made from selling an asset at a higher price than its purchase cost, officially recognized once the transaction is completed.

Fair Value

The value obtained for disposing of an asset or incurred in transferring a liability during a regulated deal among market entities on the date of measurement.

Net Income

The amount of profit left after all operating expenses, taxes, and interest are paid, indicating a company's financial performance over a specific period.

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery.