If an Investor Wanted to Reduce the Risk of a Levered

question 97

Multiple Choice

If an investor wanted to reduce the risk of a levered stock in their portfolio,how could they go about doing so while still retaining shares in the company?

• A)They could sell some of their shares and use the proceeds to buy the firm's bonds.
• B)They could sell some of their bonds and use the proceeds to buy the firm's stock.
• C)They could use borrowed funds to buy more of the firm's stock.
• D)None of these.

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Definitions:

Brain Area

Any distinct region within the brain that has a specific function or role in the body's neurological system.

Behavioral Nature

focuses on the innate and learned aspects of an individual's behavior, considering how both genetics and environment contribute to actions and reactions.

Prejudice

The negative (or positive) evaluations or judgments of members of a group that are based primarily on group membership.

Discrimination

The negative (or sometimes positive) actions taken toward members of a particular group because of their membership in the group.