For a Profitable Firm,an Increase in Which One of the Following

question 30

Multiple Choice

For a profitable firm,an increase in which one of the following will increase the operating cash flow?

• A)Employee salaries
• B)Office rent
• C)Building maintenance
• D)Depreciation
• E)Equipment rental

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Definitions:

Duration

A measure of the sensitivity of the price of a bond or a fixed income portfolio to changes in interest rates.

Interest-Rate Risk

The possibility of incurring losses in investments as a result of variations in interest rates, especially impacting fixed-income securities.

Coupon

The interest rate paid by a bond, usually expressed as a percentage of the bond's face value.

Cash Flow Matching

A form of immunization, matching cash flows from a bond portfolio with those of an obligation.