Price Risk Is Defined As: _________

question 119

Multiple Choice

Price risk is defined as: _________

• A) The risk associated with the volatility in price of the goods a firms sells.
• B) The risk that the price of the goods it sells will decline before the goods get to market.
• C) The risk that the price of the goods it sells will grow before the goods get to market.
• D) The risk that the price of the input commodities used in the production of the good they make will fluctuate.
• E) The risk a firm will not be able to sell its goods at a price sufficiently higher than the acquisition cost.

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Definitions:

Common Stock

The security representing ownership of a corporation. Equity.

Invested Funds

Capital that has been placed into a project or company, with the expectation of generating income or profit.

Flotation Costs

The administrative cost of issuing new securities. Consists largely of commissions and marketing fees, but printing and engraving costs can also be significant.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders.