Which One of the Following Is the Best Example of a Risk

question 16

Multiple Choice

Which one of the following is the best example of a risk associated with stock ownership?

• A) The stock paid a regular quarterly dividend.
• B) The firm's net income decreased by 4 percent for the quarter, as had been expected.
• C) One of the firm's patent applications was unexpectedly rejected.
• D) The firm's cost of debt increased as the result of an expected tax cut.
• E) The firm's production costs increased in line with previous years.

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Definitions:

Unions

Organizations formed by workers to protect their rights and interests through collective action and negotiation with employers.

Corporations

Legal entities that are separate from their owners, with the ability to own property, sue or be sued, and engage in contracts and business activities.

AFL-CIO

The American Federation of Labor and Congress of Industrial Organizations, a national trade union center in the United States representing over 12 million active and retired workers.

Political Lobbying

The activity of influencing public officials and legislators to enact laws or policies that favor the interests of specific individuals or groups.