Which of the Following Statements Regarding Financial Risk and Business

question 83

Multiple Choice

Which of the following statements regarding financial risk and business risk is true?

• A) The acceptable level of financial risk for a firm depends on its business risk.
• B) A firm with a greater degree of business risk has the ability to take on more debt.
• C) A firm with a greater degree of financial risk typically takes on less business risk.
• D) Financial risk and business risk are both important but they are not related in any way.
• E) Financial risk is more important for small firms and business risk is more important for large firms.

---

Definitions:

Urban Chicago

Pertaining to the characteristics, lifestyle, or geographical aspects of Chicago as a major city in the United States.

Basketball

A team sport in which two teams, typically consisting of five players each, try to score points by throwing a ball through the opponent's hoop.

Hispanic

Relating to Spain or to Spanish-speaking countries, especially those of Latin America, or relating to people of Spanish-speaking ancestry.

High-SES Families

Households with high socioeconomic status, typically characterized by higher income, education, and occupational status.