Which of the Following Is the Best Definition of Financial

question 79

Multiple Choice

Which of the following is the best definition of financial risk?

• A)Risk is the uncertainty regarding the gain or loss from an investment.
• B)Risk is the possibility that an investment's actual return will be less than its expected return.
• C)Risk is the possibility that an investment will earn a negative return.
• D)Risk is the possibility that an investment will lose money.

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Definitions:

Long Run

A period of time sufficiently long that all inputs or factors of production can be varied by firms, allowing them to fully adjust to market conditions.

Variable Costs

Expenses that vary directly with the amount of production or business activity.

Fixed Costs

Costs that do not change with the level of output or production, such as rent or salaries.

Average Fixed Costs

The total fixed costs of production divided by the number of units produced, showing how fixed costs per unit change with production levels.