Buying Firms Use Competitive Bidding When _____ Is a Dominant

question 61

Multiple Choice

Buying firms use competitive bidding when _____ is a dominant criterion and the required items or services have ______ specifications.

• A)price….unique
• B)delivery….unique
• C)product performance….straightforward
• D)design….unique
• E)price….straightforward

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Definitions:

Maturity at Issue

The predetermined date when a financial instrument, such as a bond, will come due and the principal is to be paid back to investors.

Default Risk

The potential risk that an issuer of a bond or other debt security will be unable to make principal and interest payments when due.

Collateral Trust Bond

A type of bond that is secured by a pledge of collateral, typically securities, placed under the trust of a third party.

Securities

Financial instruments representing ownership (stocks), a debt agreement (bonds), or rights to ownership (derivatives) that can be bought and sold in financial markets.