Which of the Following Best Describes a Pure Risk

question 61

Multiple Choice

Which of the following best describes a pure risk?

• A)an uncontrollable risk that cannot be insured
• B)the outcome will either be a loss or no change
• C)the outcome will be either a loss or a gain
• D)a risk with three possible outcomes

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Definitions:

Average Collection Period

The average number of days it takes for a company to receive payment after a sale has been made on credit.

Accounts Receivables

Money owed to a business by its customers for goods or services that have been delivered or used but not yet paid for.

Cost of Goods Sold

Represents the direct costs attributable to the production of goods sold in a company, including the cost of the materials and labor used to create the product.

Leverage Ratios

Financial ratios that measure the extent to which a firm uses debt as a source of financing and its ability to service that debt.