Which of the Following Is TRUE of Risk

question 206

Multiple Choice

Which of the following is TRUE of risk?

• A)Risk and return are inversely proportionate to each other.
• B)Higher the risk associated with a security the lower is its return.
• C)Risk is a measure of the uncertainty surrounding the return that an investment will earn.
• D)Riskier investments tend to have lower returns as compared to T-bills which are risk free.

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Definitions:

Marginal Product

The additional output generated by employing one more unit of a specific factor of production, holding other factors constant.

Optimal Labor Employment

The ideal quantity of labor that a firm employs where the marginal cost of hiring an additional worker equals the marginal revenue product.

Power Drills

Electric tools designed for drilling holes or driving fasteners into various materials.

Marginal Product

Marginal product is the additional output that is produced by using one more unit of a particular input, keeping all other inputs constant.