Risk Avoidance Is the Best Risk Management Tool When the Chance

question 15

Multiple Choice

Risk avoidance is the best risk management tool when the chance of loss is ______________ and the potential severity of loss __________________.

• A)high, high
• B)low, low
• C)low, high
• D)high, low

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Definitions:

Constant In Total

A term that refers to a cost or expense that remains unchanged in total, regardless of changes in the related level of activity or volume.

Break-Even Point

The level of activity at which total revenue equals total costs.

Total Sales

Total Sales represents the aggregate revenue a company generates from selling its goods or services within a specific period before any expenses are deducted.

Variable Costs

Costs that vary directly with the level of production or volume of output.