Which of the Following Is Not Correct

question 10

Multiple Choice

Which of the following is not correct?

• A)The higher average return on stocks than on bonds comes at the price of higher risk.
• B)Risk-averse persons will take the risks involved in holding stocks if the average return is high enough to compensate for the risk.
• C)Insurance markets reduce risk,but not by diversification.
• D)Risk can be reduced by placing a large number of small bets,rather than a small number of large bets.

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Definitions:

Net Worth

Assets minus liabilities, which demonstrates the value of a business.

Business Value

The importance or worth of something to a business, including tangible and intangible benefits that contribute to the company's success.

Balance Sheet

Also known as a “statement of financial position”; reveals a company’s assets, liabilities and owner’s equity (net worth).

Financial Position

Refers to the status of an entity's assets, liabilities, and equity at a specific point in time, providing insight into its economic situation.