Which of the Following Statements Is Correct Regarding Total Risk

question 39

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 is 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 statements are correct.

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Definitions:

Carbon Atoms

The fundamental building blocks of organic molecules, capable of forming four covalent bonds.

Molecule

The smallest unit of a chemical compound that can exist, consisting of two or more atoms bonded together.

Condensed Structure

A representation of a molecular structure that omits certain atoms or groups, assuming the reader will infer their presence to simplify depictions of organic compounds.

Structural Formula

A graphical representation of a molecular structure, showing how atoms are arranged and bonded together within a molecule.