An Example of ________ Risk Occurs When the Financial Return

question 61

Multiple Choice

An example of ________ risk occurs when the financial return on an investment does not keep up with prices that are increasing in the overall economy.

• A)market
• B)interest
• C)inflation
• D)business failure
• E)current

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Definitions:

Stock Split

A corporate action that increases the number of shares outstanding, reducing the price per share without changing the company's market capitalization.

Paid in Surplus

The amount of money paid to a company by investors in exchange for stock, beyond the par value of the stock.

Par Value

The face value of a bond or stock, as determined at the time of issuance.

Reverse Stock Split

A reverse stock split is an action taken by a corporation to reduce the number of its current shares in the market, thereby increasing the share price.