Which of the Following Statements About Leverage Is Not Correct

question 51

Multiple Choice

Which of the following statements about leverage is not correct?

• A)Measuring the degree of operating leverage is a form of measuring risk.
• B)Decisions about the use of debt or equity affect a company's financial leverage.
• C)Decisions about whether to use fixed or variable costs affect a company's operating leverage.
• D)The degree of financial leverage measures the extent to which fixed costs are used to operate the business.

---

Definitions:

Response Variable

In statistics, the variable that measures an outcome or result of a study, which the researcher aims to predict or explain.

Obstacle Course

An obstacle course is a series of challenging physical barriers that an individual or team must navigate, usually designed for training, military, or sport purposes.

Driving Accuracy

A measure in golf, among other contexts, referring to how often drives land in the fairway.

Lurking Variable

A variable that is not explicitly included in a model but influences both the independent and dependent variables, potentially confounding the results.