____ Are at the Heart of ____ Decisions

question 15

Multiple Choice

____ are at the heart of ____ decisions.

• A) Computer analyses; sequential
• B) First-level managers; primary
• C) Forecasts; linear
• D) Decision rules; programmed
• E) Decision theorists; objective

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Definitions:

Option

A contract that gives its holder the right to buy or sell an asset at some predetermined price within a specified period of time.

Sweetener

A feature that makes a security more attractive to some investors, thereby inducing them to accept a lower current yield. Convertible features and warrants are examples of sweeteners.

Bankers' Acceptance

A short-term debt instrument issued by a company that is guaranteed by a commercial bank, commonly used in international trade.

Securitization

The process whereby financial instruments that were previously thinly traded are converted to a form that creates greater liquidity. Securitization also applies to the situation where specific assets are pledged as collateral for securities, and hence asset-backed securities are created. One example of the former is junk bonds; an example of the latter is mortgage-backed securities.