Which One of the Following Is NOT True of Risk

question 88

Multiple Choice

Which one of the following is NOT true of risk?

• A) It includes the length of time the asset will be unavailable for other uses.
• B) It includes the probability that the strategy will be effective.
• C) Managers who own a significant amount of stock in their firms are less likely to engage in risk-taking actions.
• D) It includes the amount of assets the corporation must allocate to that strategy.
• E) The greater the assets involved, the more likely top management is to demand a high probability of success.

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Definitions:

Current Ratio

A financial liquidity metric that compares a company's current assets to its current liabilities, used to evaluate its ability to pay short-term obligations.

Temporary Accounts

Accounts that track revenues and expenses within a specific accounting period and are reset to zero at the period’s end.

Prepaid Rent

A type of asset account on the balance sheet that represents rent payments made in advance of the rental period.

Adjusting Entry

A journal entry made in accounting to update the records for accruals and deferrals that have not yet been recorded.