Which One of the Following Is True

question 117

Multiple Choice

Which one of the following is true?

• A) When choosing an investment, risk factors are rarely necessary.
• B) A risk exists that the financial return on an investment will not keep pace with the rate of inflation.
• C) A risk exists that market interest rates of bonds are the result of changes in business conditions faced by companies.
• D) A risk exists that business failures result from moderate changes in market interest rates.
• E) The prices of stocks, bonds, and other investments never fluctuate in the market.

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Definitions:

Gain on Disposal

is the financial profit made from the sale of an asset, which exceeds its carrying amount.

Insurance Cheque

A payment issued by an insurance company to cover losses or claims.

Carrying Amount

Carrying amount, also known as book value, is the value recorded on the balance sheet for a particular asset, reflecting its original cost minus any depreciation, amortization, or impairment costs.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life.