Which One of the Following Is a True Statement

question 103

Multiple Choice

Which one of the following is a true statement?

• A) When choosing an investment, it is not necessary to consider the risk factor.
• B) During inflationary times, there is a risk that the financial return on an investment will not keep pace with the rate of inflation.
• C) The interest rate risk associated with investments in bonds is the result of changes in business conditions faced by companies.
• D) The risk of business failure deals with changes in the value of stocks and bonds due to changes in interest rates in the market.
• E) The prices of stocks, bonds, and other investments never fluctuate in the market.

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Definitions:

Perpetual Inventory System

An inventory management method that continuously tracks inventory levels and updates after every transaction.

Terms 2/10

A common payment term indicating that a buyer can take a 2% discount on the invoice amount if paid within 10 days.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for, typically recorded on the balance sheet.

Perpetual Inventory System

An approach in inventory accounting that employs computerized point-of-sale systems and enterprise asset management software to instantaneously record the purchase or sale of inventory items.