The Six Principles of Finance Include All of the Following

question 96

Multiple Choice

The six principles of finance include all of the following except:

• A)Money has a time value.
• B)Higher returns are expected for taking on more risk
• C)Diversification of investments can reduce risk
• D)Financial markets are efficient in pricing securities
• E)all of the above are included in the six principles.

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Definitions:

Wages and Profits

The income earned by workers and the revenue earned by owners or shareholders from their investment, respectively.

Interest and Profits

The returns on investment from lending money and the surplus revenues from successful business operations, respectively.

Resource Suppliers

Entities or individuals that provide the essential inputs required for the production of goods and services, such as labor, raw materials, and capital.