Which of the Following Industries Would Most Likely Have the Highest

question 106

Multiple Choice

Which of the following industries would most likely have the highest value for the ratio of sales to property,plant,and equipment?

• A)Airline
• B)Consumer product manufacturing company
• C)Electric utility
• D)Stock brokerage

---

Definitions:

Frederick Macaulay

An economist known for pioneering the concept of bond duration, which measures the sensitivity of a bond's price to changes in interest rates.

Duration Concept

A measure of the sensitivity of a bond's price to changes in interest rates, gauging how much a bond's price will change for a given fluctuation in rates.

Price Volatility

The degree of variation in the price of a financial instrument, commodity, or market index over time, often measured by the standard deviation of returns.

Convexity

This is a measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, indicating how the duration of a bond changes as the interest rate changes.