Mia, a Manager at Best Buy, Increases the Order Size

question 9

Multiple Choice

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

• A)increase both ordering costs and carrying costs
• B)increase ordering costs and decrease carrying costs
• C)decrease both ordering costs and carrying costs
• D)decrease ordering costs and increase carrying costs

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Definitions:

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used in assessing bonds and other fixed-income investments.

5 ½% Bond

A bond that pays a 5.5% interest rate to its holders, typically annually or semi-annually.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including all interest payments and the repayment of principal.

8% Bond

A bond that pays an annual interest rate of 8% of its face value to the bondholders.