Which of the Following Statements Related to Financial Risk Are

question 54

Multiple Choice

Which of the following statements related to financial risk are correct?
I.Financial risk is the risk associated with the use of debt financing.
II.As financial risk increases so too does the cost of equity.
III.Financial risk is wholly dependent upon the financial policy of a firm.
IV.Financial risk is the risk that is inherent in a firm's operations.

• A)I and III only
• B)II and IV only
• C)II and III only
• D)I, II, and III only
• E)I, II, III, and IV

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Definitions:

Information Power

The influence and control one gains from possessing, controlling, and disseminating valuable information.

Ability

Innate and learned competency; talent required to perform a task; one’s level of achievement based on skill, motivation, and expectation that one will succeed. The greater the ability, the greater the potential for leadership effectiveness. See job knowledge.

Servant Leader

A leadership philosophy which posits that the main goal of a leader should be to serve others, placing the needs of the team above their own.

Servant Leadership

A leadership philosophy that emphasizes the leader's role as a servant first, prioritizing the needs of the employees and organization over personal gain.