A Good Way to Minimize Risk and Receive an Optimum

question 46

Multiple Choice

A good way to minimize risk and receive an optimum return on your portfolio is:

• A)through diversification.
• B)to buy only risk-free securities.
• C)through blue-chip stock purchases only.
• D)through junk-bonds.

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Definitions:

Sales Discounts

Refers to the reduction in the amount payable by a customer if the customer pays their invoice within a specific period as defined by the seller.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible.

Allowance Method

An accounting technique used to estimate and account for potential uncollectible accounts receivable and bad debts.

Net Realizable Value

The projected selling price of items subtracted by their sales or disposal expenses.