Financial Risk Is Defined as The

question 42

Multiple Choice

Financial risk is defined as the:

• A)credit risk associated with the firm's borrowing
• B)equity risk that is derived from a firm's daily operations
• C)equity risk that comes from the capital structure of a firm
• D)risk associated with a firm's level of surplus cash
• E)probability that a firm's weighted average cost of capital (WACC)will increase

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Definitions:

Pension Reform Act

Legislation aimed at improving, modifying, or reforming the guidelines and operations of pension schemes and retirement benefits.

Net Periodic Pension Cost

The total cost charged to expense related to pension plans during a certain period, including service and interest costs.

Defined Benefit Pension Plan

A defined benefit pension plan is a retirement plan where the employer promises a specified pension payment upon retirement, based on an algorithm involving salary, age, and years of service.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards used in financial reporting and accounting.