How Is Risk Measured

question 51

Multiple Choice

How is risk measured?

• A)by the median value of the returns
• B)by the variance of returns about the average
• C)by the mean value of returns
• D)by the average number of stocks and bonds sold international

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Definitions:

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volumes, reflecting the proportion of fixed costs in a company's cost structure.

Financial Break-Even

The point at which total revenues equal total costs and expenses, resulting in neither profit nor loss.

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Cash Break-Even

The point at which a business's cash inflows equal its cash outflows, excluding financing or investment income.