Which of the Following Statements Is Correct Regarding Total Risk

question 10

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 choices are correct.

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Definitions:

Sensory Memory

The shortest-term element of memory, responsible for holding sensory information for a few seconds or less.

Photographic Memory

A rare ability to recall images, sounds, or objects in great detail after only a few instances of exposure, without using mnemonics.

Classical Conditioning

A type of learning in which we link two or more stimuli; as a result, to illustrate with Pavlov’s classic experiment, the first stimulus (a tone) comes to elicit behavior (drooling) in anticipation of the second stimulus (food).

Implicit Memories

Memories that are not consciously recalled but influence behaviors and knowledge, such as procedural memory for tasks.