Which of the Following Statements Is Correct Regarding Total Risk

question 85

Multiple Choice

Which of the following statements is correct regarding total risk?

• A) A conglomerate will have more total risk than a firm that has one line of business.
• B) All firms have about the same total risk because they are all exposed to the same market risk.
• C) Total risk can be quantified by measuring the covariance between the firm and the overall market.
• D) None of these statements are correct.

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Definitions:

Rust Protection

Measures or treatments applied to metal surfaces to prevent corrosion, which can include coatings, platings, and environmental controls.

Knurling

A manufacturing process applied to create a patterned texture on the surface of a metal part, typically for added grip and aesthetic appeal.

Flat Taper

A gradual reduction in thickness or diameter across a flat surface or material.

Shims

Thin pieces of material used to fill small gaps or spaces between objects for proper fit, alignment, or support.