Because Savers Are Generally Risk-Averse

question 15

Multiple Choice

Because savers are generally risk-averse

• A)the long-run return on corporate bonds is greater than the long-run return on corporate stocks.
• B)they are more concerned about expected returns than about the variability of those returns.
• C)yields incorporate an extra premium for bearing default risk.
• D)they prefer higher returns to lower returns, holding default risk constant.

Understand the difference between service, retail, and manufacturing businesses.

Distinguish between internal and external users of financial statements.

Grasp the basic concepts of income, expenses, and profit in accounting.

Recognize the differences in accounting standards between FASB and IASB.

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