Max's Tire Center Company

question 2

Multiple Choice

Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.

- Refer to the selected data provided for Max's Tire Center. Which of the following would result from a horizontal analysis of Max's balance sheet?

• A) Inventory increased by 19.57% during 2012.
• B) Inventory increased by 26% during 2012.
• C) Inventory is 11.0% of total assets in 2012.
• D) The total assets is $500,000 in 2012.

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market, used in the capital asset pricing model to determine risk.

Risk-Free Rate

The theoretical rate of return of an investment with no risk of financial loss, often represented by the yield on government bonds.

Systematic Risk

The risk inherent to the entire market or market segment, unmitigable through diversification, often related to economic, political, or societal factors.

Market Risk

The potential for an investor to experience losses due to factors that affect the overall performance of the financial markets.