Once a Long-Term Contract with a Supplier Has Been Executed

question 41

True/False

Once a long-term contract with a supplier has been executed, it is much more difficult (and expensive) to switch suppliers.

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Definitions:

Beta

A measure of a stock's volatility in comparison to the market as a whole.

Risk Premium

The additional return required by an investor for tolerating a higher level of risk compared to a safe investment.

Market Risk

The possibility for investors to experience losses due to factors that affect the overall performance of the financial markets.

Total Risk

The complete spectrum of all types of risk that an investment or project could potentially face, including both systematic and unsystematic risks.