Unanticipated Diseconomies of Scale or Scope Are a Result of

question 108

Multiple Choice

Unanticipated diseconomies of scale or scope are a result of

• A)interest rate risk.
• B)technology risk.
• C)credit risk.
• D)foreign exchange risk.
• E)off-balance-sheet risk.

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Definitions:

Risk Aversion

The tendency of investors to prefer safer investments over riskier ones to avoid loss.

Investors Prefer

Refers to investors' tendencies to favour certain assets, securities, or investment strategies based on risk, return, and personal preferences.

Expected Return

The predicted amount of profit or loss an investment generates based on historical performance or analyst forecasts.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield of government securities.