The Key Difference Between a Kickback and a Contingent Fee

question 15

Multiple Choice

The key difference between a kickback and a contingent fee is:

• A) The amount involved
• B) Whether the percentage of the gain shared is equal or not
• C) A kickback refers to an unlawful transaction and contingent fees relate to lawful transactions
• D) All of the above

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Definitions:

Interest Rate Risk

The potential for investment losses due to fluctuations in interest rates.

Zero Coupon Treasury Bond

A government bond that does not pay interest throughout its life and is sold at a discount from the face value.

Reinvestment Rate Risk

The risk that the returns from reinvesting cash flows will be lower than expected due to changes in interest rate.

Market Interest Rate

The prevailing rate of interest available in the marketplace for securities of similar risk and maturity.