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:

Mortgage Holder

An entity or individual who holds the lien on a property; typically, this is the lender in a mortgage agreement.

Mortgage Debt

The amount of money a borrower owes to a lender, secured by real property through a mortgage agreement.

Law of Conveyancing

A body of law pertaining to the transfer of ownership of property rights from one person to another.

Marketable Title

A clear title to real estate that is free from any significant liens or encumbrances, making it readily sellable.