A Risk-Return Trade-Off Is the Idea That

question 40

Multiple Choice

A risk-return trade-off is the idea that:

• A)there is always a risk to selling weapons to other states.
• B)states can get the best deal by threatening all-out war with another state.
• C)states can reduce the risk of war during a crisis by returning diplomatic messages quickly.
• D)states want to minimize the chance of war but also get the best deals they can.

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Definitions:

Profit Margin

Measures the percentage of each dollar of sales that results in net income; computed by dividing net income by net sales.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating how efficiently a company is producing or sourcing its products.

Net Income

The amount of money a company earns after subtracting all its expenses from its total revenues.

Acid-test Ratio

A financial measurement of a company's immediate liquidity position, calculated by dividing liquid assets by current liabilities.