An Investor Who Is ______________ Will Choose a Risky Investment

question 34

Short Answer

An investor who is ______________ will choose a risky investment only if the expected return on the investment is high enough to compensate the investor for bearing the risk.

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Definitions:

Period Costs

Overheads that do not have a direct connection to the creation of products and are recorded as expenses in the timeframe they occur.

Traditional Format

In accounting, refers to the conventional presentation of financial statements, including the income statement that separates costs into fixed and variable categories.

Contribution Format

An income statement format that separates fixed costs from variable costs to show the contribution margin.

Merchandising Company

A business that purchases finished goods for resale, making a profit by selling them at a higher price than the cost.