A United States Firm Recently Won a Large Contract with a Company

question 343

Multiple Choice

A United States firm recently won a large contract with a company in Malaysia, by providing the foreign nation's government officials with American cars and a promise of additional monetary gifts. Clearly, this procedure:

• A) violates the Foreign Corrupt Practices Act.
• B) violates the Fair and Balanced Competitive Practices Act.
• C) defines the common business practices of the foreign nation and should be respected.
• D) defines the terms of the business contract, and as long as both parties sign, the agreement is binding.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, considering all interest payments and the principal repayment.

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, reflecting the change in the bond’s price for a 1% change in yield.

Annual Interest

The percentage of interest that will be charged or earned on an investment or loan, calculated on an annual basis.

Coupon Rate

The annual interest rate paid by the issuer of a bond to the bondholder, usually expressed as a percentage of the bond's face value.