Which One of the Following Statements Concerning Risk Is Correct

question 164

Multiple Choice

Which one of the following statements concerning risk is correct?

• A) The financial risk of a firm is NOT affected by the capital structure of that firm.
• B) An international firm has less exchange rate risk than a national firm.
• C) A firm can lower its financial risk by lengthening the term of its debt.
• D) The goal of financial engineering is to totally eliminate the financial risk of a firm.
• E) A firm can reduce its financial risk by combining various types of operations.

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Definitions:

Admissible In Court

Pertains to evidence that is allowed to be presented before the court as part of the trial proceedings.

Suspected Crime

An act believed to potentially be criminal based on preliminary evidence or suspicion but not yet legally proven.

Search Warrant

A legal document authorized by a judge or magistrate, allowing law enforcement to conduct a search of a premises for evidence of a crime.

Plea Bargaining

The process by which the accused and the prosecutor in a criminal case work out a mutually satisfactory disposition of the case, subject to court approval. Usually, plea bargaining involves the defendant's pleading guilty to a lesser offense in return for a lighter sentence.