A Caution About Cost Cutting Is That It Can Lead

question 52

Multiple Choice

A caution about cost cutting is that it can lead to

• A) low morale and lower quality goods and services.
• B) the image of a cheap company
• C) both a & b
• D) increase the cost of supplies

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Definitions:

Capital Gain

The profit realized from the sale of a capital asset, such as stock or real estate, when the selling price exceeds the original purchase price.

Term To Maturity

The remaining time until a debt instrument is due for repayment.

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, modified to account for changes in cash flow schedules.

Basis Points

One basis point is equal to 1/100th of 1%, used primarily to denote the change in interest rates, equity indexes, and the yield of fixed-income securities.