A Material Weakness Caused by Ineffective Oversight of the External $\begin{array} { c c c } & \quad\quad\quad \mathrm{PCAOB} & \text {The Stock Exchange That } \\&& \text {the Company is Listed On}\\\end{array}$

question 4

Multiple Choice

A material weakness caused by ineffective oversight of the external financial reporting function by the audit committee will ordinarily result in communication to:  
$\begin{array} { c c c } & \quad\quad\quad \mathrm{PCAOB} & \text {The Stock Exchange That } \\&& \text {the Company is Listed On}\\\end{array}$
A- $\begin{array} { c c c } \quad\quad\quad\text { Yes } &\quad\quad\quad\quad \text { Yes } \\\end{array}$
B- $\begin{array} { c c c }\quad\quad\quad \text { Yes } &\quad\quad\quad\quad \text { No } \\\end{array}$
C- $\begin{array} { c c c } \quad\quad\quad\text { No } & \quad\quad\quad\quad\text {Yes } \\\end{array}$
D- $\begin{array} { c c c }\quad\quad\quad \text { No } &\quad\quad\quad\quad \text { No }\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Substitution Swap

A Substitution Swap is a strategy in fixed-income markets where an investor exchanges one bond for another with similar features but more attractive terms.

Interest Rate Risk

The risk of losing value in an investment due to a change in interest rates, affecting both bonds and loans.

Long-Duration Bonds

Bonds with a longer time until maturity, typically more than 10 years, making them more sensitive to changes in interest rates.

Duration Rule

A principle that estimates the sensitivity of a bond's price to changes in interest rates, calculated as the weighted average time until a bond's cash flows are received.