Which of the Following Statements Regarding Risk,or the Avoidance of Risk,is

question 38

Multiple Choice

Which of the following statements regarding risk,or the avoidance of risk,is correct?

• A)A firm's business risk is determined solely by the financial characteristics of its industry.
• B)Risk due to industry characteristics is beyond the control of the firm's management.
• C)One of the benefits to a firm of being at or near its target capital structure is that this eliminates any risk of bankruptcy.
• D)A firm's financial risk can be minimized by diversification.

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Definitions:

Wealth Distribution

The manner in which wealth is distributed among the individuals in a society.

Income Inequality

Income inequality describes the extent to which income is distributed unevenly among a population.

Unequally Distributed

Refers to an unequal allocation or distribution of resources, wealth, or opportunities among different individuals or groups.

Income Inequality

Inequitable apportionment of income among household or personal entities within an economic framework.