The Practice of Dividing Packages of Debts into Slices, Each

question 106

Multiple Choice

The practice of dividing packages of debts into slices, each with different risk and return characteristics, is called:

• A) leveraging.
• B) bundling.
• C) pooling.
• D) tranching.

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Definitions:

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the profit from the investment by the cost of the investment.

Goal Congruence

The alignment of individual, team, or department goals with the overall objectives of the organization to ensure everyone is working towards the same outcomes.

Expectancy Theory

A theory in psychology that explains the process individuals undergo to make decisions based on the expected outcomes of their actions.

Incentive System

A method or plan used to motivate individuals or groups towards achieving certain performance goals.