Which of the Following Statements Is Correct Regarding Total Risk

question 108

Multiple Choice

Which of the following statements is correct regarding total risk?

• A) The coefficient of variation is a measure of the firm's total risk.
• B) All firms have the same amount of total risk because they are all exposed to the same market risk.
• C) Conglomerates will have less total risk than a firm that has one line of business.
• D) None of these choices are correct.

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Definitions:

Canadian Bond Market

The marketplace where Canadian government and corporate bonds are issued and traded, reflecting Canada's economic condition and interest rates.

Canadian Market

The financial and economic market within Canada, encompassing various sectors, including the Toronto Stock Exchange (TSX).

U.S. Bond Market

The financial market in which U.S. government and corporate bonds are traded, essential for investors looking for debt securities.

Mortgage Bond

A bond for which the corporation pledges certain assets as security. All such bonds are written subject to an indenture.