Identify the Statement That Is Incorrect

question 204

Multiple Choice

Identify the statement that is incorrect.

• A) Lower financial leverage involves lower risk.
• B) Higher financial leverage involves higher risk.
• C) The debt ratio is one measure of financial risk.
• D) Risk is higher if a company has more liabilities.
• E) Risk is higher if a company has higher assets.

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Definitions:

Mortgage Loans

Loans secured by real property through the use of a mortgage note, typically used to purchase real estate.

Moderate Incomes

Earnings that are neither too high nor too low, often associated with the middle class in a given society.

Interest Rates

The cost of borrowing money or the return for investing, expressed as a percentage of the principal, influencing consumer and business spending.

Interest-sensitive Goods

Products or services whose demand is heavily influenced by changes in interest rates, such as housing and automobiles.