A Concentration of Firms in a Particular Location Is Called

question 55

Multiple Choice

A concentration of firms in a particular location is called ______.

• A)an association
• B)a concentration
• C)a grouping
• D)a clustering

Recognize the impact of different levels of accounts receivable on financial costs and customer relations.

Grasp the components and significance of a firm's credit policy.

Comprehend the role and mechanisms of floats in financial management.

Interpret the effects of relaxing or tightening credit policies and collection procedures on financial indicators.

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Definitions:

Diversification

Reducing risk by investing in several different things, so that the possible losses are independent events.

Pooling

A strong form of diversification in which an investor takes a small share of the risk in many independent events, so the payoff has very little total overall risk.

Risk Reduction

Strategies or actions implemented to minimize the probability or impact of negative events or losses.

Market for Risk

A financial market where individuals and institutions trade financial instruments to manage risk exposure.