Consider the Following List of Risk Factors: Which of the Following

question 38

Multiple Choice

Consider the following list of risk factors: Which of the following factors would you use to develop a microeconomic-based risk factor model?

• A) (1), (2), and (3)
• B) (1), (3), and (5)
• C) (2), (4), and (5)
• D) (1), (3), and (6)
• E) (4), (5), and (6)

---

Definitions:

Direct Method

A technique used in cost accounting to allocate service department costs directly to production departments without considering service department interactions.

Operating Activities

The day-to-day tasks involved in managing a business which include production, sales, and the purchase of inventory.

Cash Dividends

A distribution of a company's earnings to shareholders in the form of cash payments.

Direct Method

A way of preparing a cash flow statement where actual cash inflows and outflows from operational activities are listed directly.