As You Allocate More of Your Investment Portfolio to Bonds

question 42

Multiple Choice

As you allocate more of your investment portfolio to bonds, you reduce your exposure to ________ risk, but increase your exposure to ________.

• A) interest rate; business risk
• B) business; default risk
• C) market; interest rate risk
• D) default; liquidity risk

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Definitions:

Full Cost

The total cost of production, encompassing direct and indirect costs.

Mark-Up Percentage

The proportion of cost added to the selling price over the actual cost to achieve profit.

Target Profit

The amount of net income a company aims to achieve within a specific period as part of its financial and operational goals.

Legal Issues

Challenges or disputes arising within the framework of the law, affecting individuals, businesses, or relationships.