Which of the Following Statements Is CORRECT

question 46

Multiple Choice

Which of the following statements is CORRECT?

• A) All else equal,high-coupon bonds have less reinvestment risk than low-coupon bonds.
• B) All else equal,long-term bonds have less price risk than short-term bonds.
• C) All else equal,low-coupon bonds have less price risk than high-coupon bonds.
• D) All else equal,short-term bonds have less reinvestment risk than long-term bonds.
• E) All else equal,long-term bonds have less reinvestment risk than short-term bonds.

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Definitions:

Inventory Turnover

A financial ratio that measures the number of times a company’s inventory is sold and replaced over a specific period, reflecting the efficiency of inventory management.

Cost of Goods Sold

Cost of Goods Sold (COGS) is an accounting term representing the direct expenses related to the production of items sold by a company, including materials and labor.

Current Assets

Assets that are expected to be converted into cash, sold or consumed within one year or within the business's operating cycle, whichever is longer.

Fixed Asset Turnover Ratio

A financial metric that measures a company's ability to generate net sales from its fixed assets, such as plant, property, and equipment, indicating efficiency in using these assets to generate revenue.