________ Is the Risk You Take When You Lock into a Fixed-Rate

question 56

Multiple Choice

________ is the risk you take when you lock into a fixed-rate investment for a specific length of time.

• A)Default risk
• B)Interest rate risk
• C)Market risk
• D)Liquidity risk

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Definitions:

EBIT

Earnings Before Interest and Taxes, a firm's earnings metric, accounts for all operational expenses aside from interest and taxes.

Return on Equity Ratio

The return on equity ratio measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue by comparing sales with total assets.

Current Ratio

An indicator used to evaluate whether a business can meet its short-term financial liabilities, calculated through the division of its current assets by its current liabilities.