-Refer to Exhibit 2-4

question 76

Multiple Choice

-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

• A) 60,000 copiers.
• B) 40,000 copiers.
• C) 20,000 copiers.
• D) 20,000 fax machines.
• E) 40,000 fax machines.

Identify the uses of duration in immunization strategies and interest rate risk management.

Recognize the impact of yield curve predictions on bond returns.

Understand the basis and importance of swaps in bond portfolio management.

Calculate the effect of changing interest rates on bond durations and prices.

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Definitions:

Lead Time

is the total time required to manufacture an order and deliver it to the customer, encompassing all phases from order placement to final delivery.

Demand Forecasts

Predictions about future customer demand for a product or service, based on historical data, market trends, and other influencing factors.

Safety Inventory

Stock kept in reserve to protect against uncertainties in demand or supply, ensuring customer demand can be met without delays.

Demand Forecasts

Predictions about future customer demand for a product or service, based on historical data and market analysis.