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tekilochka [14]
3 years ago
9

Define liquidity risk and explain how it relates to bonds and bond yields.

Business
1 answer:
nadya68 [22]3 years ago
5 0

Answer:

Liquidity risk is the inability to quickly sell a bond for its full value. This risk exists primarily in thinly traded issues. Default risk is the likelihood the issuer will default on its bond obligations and is the basis for bond ratings.

Liquidity is a prime determiner of yield spreads, explaining up to half of the cross-sectional variation in spread levels and up to two times the cross-sectional variation in spread changes that is explained by the effects of credit rating alone.

Liquidity risk Liquidity refers to the investor's ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread. High-yield bonds can sometimes be less liquid than investment-grade bonds, depending on the issuer and the market conditions at any given time.

(If some parts overlap/relate to the exactly to other parts, I'm sorry. But there ya go !)

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Suppose you roast coffee and sell it to Maximum Markets. You have a good relationship with Maximum Markets and have relied on th
lara31 [8.8K]

Answer:

channel conflicts

Explanation:

Until now, your own distribution channel was Maximum Markets and you have a good relationship with them. Nut the goal of your business (and all businesses) is to make the largest possible profit.

So if you start to expand your distribution channels then there is a very concrete possibility that you will have conflicts with Maximum. Depending on how much you can sell through your other distribution channels will determine how your relationship goes with Maximum.

If other channels represent a very small percentage of your sales and profits, then you will be forced to offer some kind of preferential deal to Maximum. But if your other channels start to sell a lot, then you wouldn't need to worry that much about Maximum and continue your operations like they are right now.

4 0
3 years ago
A management information system (MIS) typically provides standard reports generated with data and information from a transaction
Svet_ta [14]

Answer:

True

Explanation:

It is true that management information system (MIS) typically provides standard reports generated with data and information from a transaction processing system (TPS) or enterprise resource planning (ERP) system. ion processing system

By the definition of management information system it includes transaction processing system because management information system (MIS) is a data generating or gathering process which serves as the backbone of an organization’s operations by gathering data from multiple sources, analyzes information, and presents data in a form that it aids managerial decision making.

Hence, the major areas of management information systems are:

1. Transaction Processing System. ( which includes: Payroll System, Order Processing System, Stock Control System) .

2. Decision Support System.

3. Expert Systems and Artificial Intelligence.

6 0
3 years ago
Madeline runs a lawn cutting service. She anticipates some increased expenses in her personal life in the next six months, and w
Leya [2.2K]

Answer:

The correct option is A. Need or Deficiency.

Explanation: A need is something that is necessary for an individual to function and live properly, while deficiency can be used to denote a state of lack. Our needs are often the motivating factor behind us working to earn a living, however, different people work for different reasons.

In the scenario presented above, we can see that Madeline is motivated to take on more clients due to the fact that she perceives that her needs will increase.

Therefore, the correct option to this question is that Madeline's motivation is due to need or deficiency.

8 0
4 years ago
Large projects that involve purchasing land from many landowners may not succeed due to the expenses (attorney fees, bank fees,
Andrews [41]

Answer:

The correct option is A

Explanation:

Transaction costs are the costs or the expenses which is incurred or made when it involves buying as well as selling of good or a service. And in the terms of financial nature, it is that cost or expense which comprise of  the commission of broker, that is the differences among the dealer price paid for the security and the price which the buyer pays.

So, in this case, the large projects involve the land purchasing from landowners will not succeed because of expense like bank fees, attorney fees for negotiating the different deals. These fees examples are of transaction costs.

5 0
4 years ago
The process that individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas, or experience
ludmilkaskok [199]

The process that individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires is known as  Consumer Behavior.

<h3><u>Explanation</u>:</h3>

The process that deals with the study of how the individuals and the organisations selects, purchases and uses and disposes the goods and services is the consumer behavior. These are done for the satisfaction of their wants and needs. The main thing that is associated with the consumer behavior is the motivation and psychology of the purchasing person.

It deals with the activities of the consumers in purchasing a particular product or services and the motivations that is responsible for that selection of the product. The consumer behaviors can be classified as  habitual buying,complex buying variety-seeking buying and dissonance-reducing buying.

6 0
4 years ago
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