The Difference Between Reactive and Proactive Policies of an Organization

question 27

Multiple Choice

The difference between reactive and proactive policies of an organization is that:

• A)unlike reactive policies, proactive policies ignore the actions the organization will most likely take to be recognized as an ethical organization.
• B)reactive policies are driven by events and/or a fear of future events, whereas proactive policies are driven by a clear sense of what is construed as ethical for the organization.
• C)proactive policies help monitor the ethical performance of the organization only externally, whereas reactive policies monitor the organization both internally and externally.
• D)unlike proactive policies, reactive policies are true ethical policies.

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Definitions:

Amortization

Amortization refers to the process of spreading out a loan or intangible asset cost over a fixed period, typically the useful life of the asset, for accounting and taxation purposes.

Market Rate of Interest

The prevailing rate of interest determined by supply and demand in the credit market at which borrowers and lenders agree to transact.

Stated Rate of Interest

The stated rate of interest is the fixed rate that a borrower agrees to pay to a lender, expressed as a percentage of the principal loan amount.

Bond Redemption

The process of repaying the face value of a bond to the bondholders upon its maturity.