The Risk Caused by Variations in Interest Expense Unrelated to Sales

question 24

Multiple Choice

The risk caused by variations in interest expense unrelated to sales or operating income arising from changes in the level of interest rates in the economy is called:

• A) interest rate risk
• B) business risk
• C) tax risk
• D) financial risk

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Definitions:

Established Measures

Validated and widely accepted tools or instruments used to assess or measure specific variables in research.

Validity

The degree to which a research study or testing instrument accurately measures what it intends to measure.

Interval Measures

A scale of measurement where the difference between any two consecutive measures is the same, but it does not have a true zero point, e.g., temperature scales.

Equal Intervals

A measurement scale where the difference between values is the same across the scale.