The More Certain the Return from an Asset, the Less

question 49

True/False

The more certain the return from an asset, the less variability and therefore the less risk.

---

Definitions:

Equity Method

An accounting method used to assess the profits earned by investments in other companies by recording income equivalent to the investor's share of the investee's profits.

Cumulative Translation Adjustment

An entry in the comprehensive income section of a company's balance sheet that represents the aggregate effect of exchange rate changes on the translation of foreign subsidiaries' financial statements.

Current Rate Method

A method of foreign currency translation where all financial statement items are translated at the current exchange rate.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.