Exhibit 16-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 7

Multiple Choice

Exhibit 16-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Consider two bonds, both pay annual interest. Bond C has a coupon of 6% per year, maturity of 5 years, yield to maturity of 6% per year, and a face value of $1000. Bond D has a coupon of 8% per year, maturity of 15 years, yield to maturity of 6% per year, and a face value of $1000.
-Refer to Exhibit 16-8. Assume that your investment horizon is 6 years and your portfolio consists only of Bond C and Bond D. Indicate the proportions invested in each bond, so that the portfolio is immunized.

• A) 50% in Bond C and 50% in Bond D
• B) 64% in Bond C and 36% in Bond D
• C) 36% in Bond C and 64% in Bond D
• D) 100% in Bond D
• E) None of the above

Recognize examples of various reward systems used in organizations.

Identify the most effective forms of pay for improving performance as viewed by managers.

Understand the essential components and considerations for effective performance-based systems.

Learn about the importance of eligibility rules in determining coverage under total pay plans.

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Definitions:

Special Endorsement

An endorser’s signature accompanying the name of the endorsee.

Endorser

A person who signs the back of a negotiable instrument, such as a check, thereby transferring ownership or guaranteeing its payment.

Endorsement

Official approval or support of an idea, product, or entity, often documented or publicized.

Interpersonal Barrier

Obstacles to effective communication and interaction between individuals, often rooted in misunderstandings, personal biases, or social norms.