Which of the Following Strategies Does Not Reduce Risk

question 54

Multiple Choice

Which of the following strategies does not reduce risk?

• A) building flexibility into the firm's operations
• B) increasing the proportion of the firm's costs that are fixed
• C) taking out an insurance policy
• D) hedging with derivative contracts

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Definitions:

Accounts Payable

An accounting term for the amount of money a company owes to its creditors for supplies, services, or goods purchased on credit.

Balance Sheet

A financial statement that displays a company's financial position at a certain point in time, showing assets, liabilities, and shareholders' equity.

Time-Sales Finance

Financing arrangements that allow consumers to purchase goods or services over time, typically involving installment payments.

Installment Contract

A legal agreement requiring regular payments over time for the purchase of goods or services, typically used for expensive items.