#1 (permalink) Sun Nov 19, 2006 10:53 am Why 'reaction' isn't suitable here? What's "structural value"? |
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Business English Lesson, Advanced Level
ESL/EFL Test #184 "Efficient Capital Markets", question 7
Future cash flows are discounted by an interest rate that is a ......... of the riskiness of those cash flows; the riskier the cash flows, the higher is the rate used.
(a) compensation (b) function (c) reaction (d) reversal
Business English Lesson, Advanced Level
ESL/EFL Test #184 "Efficient Capital Markets", answer 7
Future cash flows are discounted by an interest rate that is a function of the riskiness of those cash flows; the riskier the cash flows, the higher is the rate used.
Correct answer: (b) function
Your answer was: incorrect Future cash flows are discounted by an interest rate that is a reaction of the riskiness of those cash flows; the riskier the cash flows, the higher is the rate used. _________________________
Hi,
Don't know why "reaction" isn't suitable here, by the way, what's "structural value"?
Thanks! F.F |
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FangFang I'm here quite often ;-)

Joined: 18 May 2006 Posts: 369
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