In a Setting Where There Is No Risk That a Firm

question 70

Multiple Choice

In a setting where there is no risk that a firm will default, leverage ________ the risk of equity.

• A) increases
• B) decreases
• C) does not change
• D) cannot say for sure

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Definitions:

Average

The numerical value representing the central or typical value in a set of data, calculated by dividing the sum of all values by the number of values.

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A statistical measure representing the middle value in a set of data when it has been arranged in order.

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The outermost layer of the Earth where humans live, including landforms, water bodies, and living organisms.