What Are the Two Factors That Are Used to Determine

question 186

Multiple Choice

What are the two factors that are used to determine where a specific financial instrument will be placed on the risk-return continuum?

• A) The prime interest rate and the quality of the company in question
• B) The amount of debt and the amount of equity the company has
• C) The size of the financial returns that must be offered to induce investment and the uncertainty about financial returns on investments
• D) The size of the financial returns that must be offered to induce investment and the economic growth prospects over the next year
• E) The mix of short- and long-term sources of funds the firm is using

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Definitions:

Reproduction

The biological process by which new individual organisms are produced, either asexually from a single parent or sexually from two parents.

Sexual Relationship

An intimate relationship between individuals that involves sexual activity.

Optimal Mating Strategy

A concept in evolutionary psychology that suggests individuals select mates in a way that will maximize their reproductive success and enhance the survival and quality of their offspring.

Parental Investment

signifies any investment by a parent in an individual offspring that increases the offspring's chance of surviving (and hence reproductive success) at the cost of the parent's ability to invest in other offspring.