Business Failure Risk

question 64

Multiple Choice

Business failure risk

• A) Cannot be diversified.
• B) Causes the business to increase its dividends.
• C) In the worst case, leads to improved earnings.
• D) Is associated with government bonds.
• E) Causes the business to be less profitable than originally anticipated.

---

Definitions:

Post Hoc Fallacy

A logical error where one assumes that since event A happened before event B, A must have caused B.

Correlation Problem

Issues arising from attempts to interpret or infer causality from purely correlational data without establishing a clear causal relationship.

Causation

The relationship between cause and effect, where one event (the cause) directly results in another event (the effect).

Economic Activity

Any action that involves the production, distribution, and consumption of goods and services within an economy.