Which Term Refers to the Risk That the Cost of Rolling

question 123

Multiple Choice

Which term refers to the risk that the cost of rolling over or re-borrowing funds will rise above the returns being earned on asset investments?

• A)Reinvestment risk.
• B)Credit risk.
• C)Refinancing risk.
• D)Liquidity risk.
• E)Sovereign risk.

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Definitions:

Average Cost Method

An inventory costing method used to determine the cost of goods sold and ending inventory by averaging the costs of all items available for sale.

Schedule D Transactions

Refers to a tax form used in the U.S. to report capital gains and losses from the sale, exchange, or disposition of capital assets.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. for tax purposes, allowing faster recovery of investments in certain property through depreciation deductions.

Depreciable Real Property

Real estate eligible for depreciation for tax purposes, meaning its cost can be deducted over a period of time.