The Following Statement Answers Which Major Question That a Business

question 35

Multiple Choice

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

• A) How much will the new business cost?
• B) Why is this new business a good idea?
• C) What are the goals for the business?
• D) What is the nature and mission of the business?
• E) How often will the business advertise?

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Definitions:

Average Duration

The weighted average time it takes for an investor to receive all cash flows from a bond or a portfolio of bonds, factoring in the present value of those cash flows.

Perpetuity

A type of annuity that lasts forever, providing payments that continue indefinitely.

Yield

The income return on an investment, expressed as a percentage of the investment’s cost or current market value.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, often noted in years.