Which of the Following Departments Is Most Likely to Be

question 206

Multiple Choice

Which of the following departments is most likely to be a profit center?

• A) the accounting department of a company that also assists in budgeting process
• B) the research and development department of a company
• C) the sales department of a company whose objective is to maximize the revenues
• D) the consulting department of a law firm

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Definitions:

Pure Expectations Hypothesis

A theory that suggests that the interest rates on long-term bonds will equal an average of current and future short-term interest rates.

Yield Curve

A graphical representation showing the relationship between the interest rates on debts of different maturities, typically of government bonds, highlighting investors' expectations for future interest rates and economic conditions.

Liquidity Premium

An additional return that investors demand for holding securities that are not easily convertible into cash without a significant loss in value.

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a specified time period, often measured as a percentage.