Full Vertical Integration Compounds Risk Because

question 8

Multiple Choice

Full vertical integration compounds risk because

• A)top managers have a complete knowledge of the entire value chain.
• B)the capital invested and the fixed costs are often much higher for a vertically integrated firm.
• C)a decline in sales and profits in the end market affects all stages simultaneously.
• D)b and c.

---

Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.

Semi-Annually

Semi-annually refers to an event or action occurring twice a year, typically every six months.

Real Rate Of Return

The yearly return percentage on an investment, modified for price level changes caused by inflation or other external factors.

Nominal Rate

The nominal rate is the interest rate set by the lending institution, not adjusted for inflation, representing the face value of the interest rate.