Risk That Can Be Eliminated by Diversification Is

question 61

Multiple Choice

Risk that can be eliminated by diversification is

• A)unsystematic risk.
• B)systematic risk.
• C)default risk.
• D)interest-rate risk.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, representing the profit made before accounting for operating expenses.

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross profit but before incomes and taxes are deducted.

Return on Total Assets

A financial ratio that measures the profitability of a company in relation to its total assets.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.