(16) What does the term “Collateral” mean in the context of loans and lending?
- (a) An asset or property offered as security to a lender in case the borrower defaults on a loan.
- (b) The interest rate charged on a loan.
- (c) The total amount of money borrowed.
- (d) The process of repaying a loan early.
(17) What is the definition of “Economies of Scale” in economics?
- (a) The cost advantages that a company can achieve when it produces more units of a product, leading to lower per-unit production costs.
- (b) The total revenue generated by a company.
- (c) The process of selling a company’s assets.
- (d) The rate at which the currency of one country can be exchanged for the currency of another.
(18) What does “Risk Management” entail in the context of finance?
- (a) The process of identifying, assessing, and mitigating potential risks to minimize their impact on an organization.
- (b) The practice of investing in high-risk assets to maximize returns.
- (c) The calculation of a company’s profit margin.
- (d) The process of obtaining short-term loans.
(19) What is the definition of “Depreciation” in accounting?
- (a) The allocation of the cost of a tangible asset over its useful life.
- (b) The increase in the value of an asset over time.
- (c) The total revenue generated by a company.
- (d) The process of selling inventory at a profit.
(20) What does the term “Benchmark” mean in finance and investing?
- (a) A standard or reference point used to measure and evaluate the performance of investments, funds, or portfolios.
- (b) The total value of a company’s assets.
- (c) The process of merging two or more companies.
- (d) The calculation of a company’s net income.
