The Two Most Important Factors in Describing an Individual or Organization's

question 65

Multiple Choice

The two most important factors in describing an individual or organization's investment objectives are ________________.

• A) income level and age
• B) income level and risk tolerance
• C) age and risk tolerance
• D) return requirement and risk tolerance

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Definitions:

Times Interest Earned

Measures a company’s ability to meet interest payments as they come due; computed by dividing the sum of net income, interest expense, and income tax expense by interest expense.

Income Statement

Financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.

Debt to Assets Ratio

A financial ratio that measures the percentage of a company's assets that are financed by debt, used to gauge a company's financial leverage.