​Jose Is Reviewing the Operating Expenses for His Business

question 162

Multiple Choice

​Jose is reviewing the operating expenses for his business. He notices that operating expenses are categorized as ___ expenses related to his business' marketing activities or ___ expenses incurred in managing the business.

• A)​selling; general
• B)​large; small
• C)​current; long term
• D)​

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Definitions:

Coupon Rate

The annual interest rate paid by a bond issuer to the bondholder, usually expressed as a percentage of the bond's face value.

Duration

A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates, often expressed in years.

Perpetuities

A type of annuity that receives an infinite series of identical cash flows with no end.

Deep Discount Bonds

Bonds that are issued at a significantly lower price than their par value, often with higher yields to compensate for the risk.