Which of the Following Would Be Included in Operating Income

question 4

Multiple Choice

Which of the following would be included in operating income?

• A)Interest income for a manufacturing firm
• B)Rent income for a leasing subsidiary
• C)Gain from sale of marketable securities for a retailer
• D)Dividend income for a service firm
• E)None of the answers are correct.

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Definitions:

Maturity Risk

Maturity risk pertains to the uncertainty and potential loss associated with holding a bond or other fixed-income investment until its maturity date.

Coupon

The percentage rate of interest a bond yields annually, based on its principal amount.

Current Yield

The annual return of an investment expressed as a percentage of its current price.

Rate of Return

The gain or loss on an investment over a specified period, proportionally expressed as a percentage of the investment's initial cost.