Why Do Centralized Organizations Tend to Be More Ethical Than

question 38

Essay

Why do centralized organizations tend to be more ethical than decentralized ones? Can you think of a situation or example in which a decentralized organization might be more ethical than a centralized one?

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Definitions:

Bond Yields

The amount of return an investor realizes on a bond, calculated as the percentage of the bond's annual interest payments relative to its market price.

Yield To Call

The return a bondholder gets if the bond is held until the call date, which is before the bond's actual maturity date.

Expected Capital Gains Yield

The anticipated rate of return from an investment due to an increase in its market price.

Reinvestment Rate Risk

Occurs when a short-term debt security must be “rolled over.” If interest rates have fallen, the reinvestment of principal will be at a lower rate, with correspondingly lower interest payments and ending value.