Which of the Following Businesses Are Most Exposed to Interest

question 36

Multiple Choice

Which of the following businesses are most exposed to interest rate risk?

• A) A company with a high equity to debt ratio
• B) A company with a large amount of floating rate debt
• C) An all-equity company
• D) An investment company with an investment portfolio that matches its investment horizon

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Definitions:

Conditioned Responses

Learned responses to a particular stimulus conditioned through repeated associations with a reinforcement or punishment.

Involuntary Response

A reflex action or response that occurs without conscious control, often as a protective mechanism.

Stimulus

An external factor or signal that triggers a physiological response in an organism.

Monogamous

Involving a relationship or mating system in which an individual has only one partner during their lifetime or at any one time.