Which Variance Measures the Efficiency with Which the Firm Uses

question 85

Multiple Choice

Which variance measures the efficiency with which the firm uses inputs to produce outputs?

• A)Throughput.
• B)Efficiency.
• C)Economy.
• D)Effectiveness.

Recognize the concepts of duration and modified duration as measures of interest rate sensitivity.

Identify the factors affecting bond duration and how they influence bond price volatility.

Understand the difference between active and passive bond portfolio management strategies.

Assess the role of interest-rate risk in bond portfolio management for both active and passive managers.

---

Definitions:

Principal Debtor

The primary individual or entity legally obligated to repay a debt or loan.

Capacity

In legal context, it refers to the ability of an individual to understand the nature and effects of one's actions, including the ability to make contracts or execute wills.

Unsecured Credit

refers to credit extended without any collateral backing, based solely on the borrower's creditworthiness and promise to repay.

Foreclosure

The legal process by which a lender takes possession of a property used as collateral for a loan due to failure of the borrower to meet the repayment terms.