The Four Basic Determinants of Business Risk Include All of the Following

question 147

Multiple Choice

The four basic determinants of business risk include all of the following EXCEPT

• A) the stability of the domestic economy.
• B) the level of fixed cost used in the company's production process.
• C) sensitivity to the business cycle.
• D) competitive pressures in the firm's industry.

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Definitions:

Perpetuity

A type of annuity that pays an infinite series of cash flows, with no end date.

Rate Of Return

Earnings or losses experienced by an investment within a chosen period, measured as a percentage of the investment’s purchase cost.

Heirs

Individuals legally entitled to inherit a deceased person's assets.

Rate Of Return

Fluctuations in the value of an investment during a pre-defined period, calculated as a percentage of the investment’s commencement cost.