Distinguish between the concepts of the maturity-risk premium and the liquidity-risk premium
What will be an ideal response?
Maturity-risk premium is the additional return required by investors in longer-term securities to compensate them for
greater risk of price fluctuations on those securities caused by interest rate changes.
Liquidity-risk premium is the additional return required by investors for securities that cannot be quickly converted
into cash at a reasonably predictable price.
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a. true b. false
An unfavorable sales volume variance in operating income suggests a(n) ________
A) increase in number of actual units sold when compared to the expected number of units sold B) decrease in number of actual units sold when compared to the expected number of units sold C) increase in variable cost per unit D) decrease in fixed costs