Which of the Following Is Not a Qualitative Issue That

question 152

Multiple Choice

Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource?

• A)Reliability of the outsource provider
• B)Stability of the price offered by the outside supplier
• C)Opportunity costs of alternatives
• D)Quality of the outsourced product

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Definitions:

Default Risk

The risk that a borrower will not make the required payments on their debt obligations.

Maturity Risk

The risk associated with the changing value of securities due to the time remaining until their maturity date.

Yield to Maturity

The total return anticipated on a bond if it is held until the maturity date, factoring in the current price, par value, coupon yield, and time to maturity.

Coupon Rate

Each year, the interest rate a bond yields, expressed in terms of the percentage of its face value.