Allison Peavy Wants to Invest but Is Worried About Risk

question 108

Multiple Choice

Allison Peavy wants to invest but is worried about risk.In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

• A)Inflation
• B)Interest rate
• C)Business failure
• D)Systematic
• E)None of these

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Definitions:

Generates Revenues

Refers to the activities or mechanisms through which a business or organization brings in income.

Traceable Fixed Cost

A fixed cost that can be directly associated with a specific cost object, such as a product, department, or project.

Common Fixed Cost

Expenses shared by different segments or units within an organization, not directly attributed to any specific part.

Responsibility Center

A unit or department within an organization for which its managers have authority and responsibility for performance and outcomes.