What Are Free Assets

question 48

Multiple Choice

What are free assets?

• A) Assets for which net realizable value is greater than historical cost.
• B) Assets for which no market exists.
• C) Assets for which replacement cost is greater than historical cost.
• D) Assets available to be distributed for liabilities with priority and for other unsecured obligations.
• E) Assets available to be distributed to stockholders.

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Definitions:

Concentrating Investment

Allocating a significant portion of an investment portfolio to a single investment or a small group of investments, increasing potential risk and return.

Systematic Risk Principle

The concept that the overall market or economy has inherent risks that affect all investments to some degree, and these risks cannot be eliminated through diversification.

Variance

A measure of the dispersion or spread of a set of data points or investment returns, reflecting how much the data points differ from the mean.

Beta

A metric that evaluates the degree of fluctuation in a stock's price against the broader market.