Assuming Riskless Debt, If the Return Risk Is ±15% with a 40

question 14

Multiple Choice

Assuming riskless debt, if the return risk is ±15% with a 40% Loan/Value Ratio, then with a 80% Loan/Value Ratio the return risk is:

• A) ±7.5%
• B) ±15%
• C) ±30%
• D) ±45%

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Definitions:

Subsidiary

A company that is controlled by another company, known as the parent company, through the ownership of more than half of its voting stock.

Trade Union

An organization formed by workers from related fields that aims to protect their rights and interests through collective bargaining.

Post-employment Benefit Plan

A financial arrangement designed to provide benefits to employees after their employment has ended, such as pensions.