In Theory, the Decision Maker Should View Market Risk as Being

question 37

Multiple Choice

In theory, the decision maker should view market risk as being of primary importance.However, within-firm, or corporate, risk is relevant to a firm's

• A) Well-diversified shareholders, because it may affect debt capacity and operating income.
• B) Management, because it affects job stability.
• C) Creditors, because it affects the firm's credit worthiness.
• D) All of the above are correct.
• E) Only answers a and c are correct.

---

Definitions:

Endocrine System

A network of glands in the body that secrete hormones into the bloodstream to regulate various bodily functions.

Chemical Messengers

Compounds such as hormones and neurotransmitters that transmit signals from one cell or organism to another, affecting physiological activities.

Hormones

Chemical messengers produced by endocrine glands that regulate various bodily functions and processes.

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for action by accelerating the heart rate, constricting blood vessels, and raising blood pressure.