The Risk That Funds May Have to Be Reinvested at a Lower

question 61

Multiple Choice

The risk that funds may have to be reinvested at a lower rate in the future is the _______________. It is generally _____________ than the ___________________.

• A)reinvestment risk, less, liquidity premium.
• B)liquidity risk, less, reinvestment premium.
• C)reinvestment risk, more, liquidity premium.
• D)liquidity premium, more, reinvestment risk.

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Definitions:

Team-Based Structure

An organizational architecture that emphasizes collaborative work and projects carried out by teams, as opposed to hierarchy or individual efforts.

Simple Structure

An organizational design with low departmentalization, wide spans of control, centralized authority, and minimal formalization.

Formal Hierarchy

A structured organization where individuals are ranked according to their levels of authority and responsibility.

Organizational Chart

A diagram that displays the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.