Which of the Following Statements Is True

question 59

Multiple Choice

Which of the following statements is true?

• A)The variable spread between a lending rate and a borrowing rate, or between any two interest rates or prices is called basis risk.
• B)The variable spread between a lending rate and a borrowing rate, or between any two interest rates or prices is called spread risk.
• C)The variable spread between a lending rate and a borrowing rate, or between any two interest rates or prices is called interest spread risk.
• D)The variable spread between a lending rate and a borrowing rate, or between any two interest rates or prices is called funding risk

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a particular period.

Profit Margin

A measure of profitability calculated as net income divided by revenue, expressed as a percentage.

Net Fixed Assets

The value of all fixed assets (like property, plant, and equipment) minus any accumulated depreciation.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations.