Business Failure Risk

question 4

Multiple Choice

Business failure risk

• A) Cannot be diversified.
• B) Causes the business to increase its dividends.
• C) In the worst case, leads to improved earnings.
• D) Is associated with government bonds.
• E) Leads to lower profitability than anticipated.

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Definitions:

Travelers' Checks

Preprinted, fixed-amount checks designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

NSF Check

A cheque that cannot be processed because the drawer's account does not have sufficient funds.

Credit Memos

Issued by a seller to a buyer, reducing the amount the buyer owes under certain conditions, like returned goods or a pricing dispute.

Accounts Receivable

Sums due to a firm by its patrons for the delivery of goods or services on credit.