Which of the Following Is Not a Component of the Risk

question 41

Multiple Choice

Which of the following is not a component of the risk premium?

• A) Business risk
• B) Financial risk
• C) Liquidity risk
• D) Exchange rate risk
• E) Unsystematic market risk

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Definitions:

Insurance

A financial product that provides protection against possible future losses or damages in exchange for a premium.

Cost Centers

Parts of an organization that do not directly generate revenue but incur costs, such as HR and IT departments, essential for the business's operations.

Manufacturing Plants

Facilities dedicated to the production of goods, often involving significant use of machinery and automation.

Control

The power to influence or direct people's behavior or the course of events or the procedures in place to manage operations, compliance, and financial reporting.