If a Sofa Costs a Retailer $420, at What Price

question 86

Multiple Choice

If a sofa costs a retailer $420, at what price should it be sold to gain a profit of 65% of the selling price?

• A) $721.00
• B) $678.00
• C) $695.00
• D) $693.00
• E) none of these

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Definitions:

Interest-Rate Risk

The possibility of incurring losses in investments as a result of variations in interest rates, especially impacting fixed-income securities.

Coupon

The interest rate paid by a bond, usually expressed as a percentage of the bond's face value.

Cash Flow Matching

A form of immunization, matching cash flows from a bond portfolio with those of an obligation.

Immunization

A strategy in fixed income investing that aims to make a portfolio's duration and interest rate risk match its liability obligations.