When All Other Factors Remain Constant, Which of the Following

question 98

Multiple Choice

When all other factors remain constant, which of the following is true?

• A) An increase in fixed costs leads to a decrease in units needed to break even
• B) An increase in variable costs leads to an increase in units needed to break even
• C) An increase in sales price leads to an increase in units needed to break even
• D) A decrease in the variable cost rate leads to an increase in the units needed to break even

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Definitions:

Original Maturity

This refers to the duration from the issuance of a bond or other fixed-income security until its due date.

Default Risk

The risk that a borrower fails to make the required payments on their debt obligation.

Canada Call Feature

A special feature on certain bonds that allows the issuer to redeem the bond before maturity in the Canadian market.

Maturity

Maturity indicates the date on which the principal amount of a financial instrument is due to be paid back.