Financial Assets with the Highest Risk Are

question 302

Multiple Choice

Financial assets with the highest risk are:

• A)stocks.
• B)U.S. government bonds.
• C)bonds.
• D)bank deposits.

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Definitions:

Trade Credit

An arrangement where a supplier allows a customer to purchase goods or services and pay for them at a later date.

Factoring

Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Capital Investment Analysis

The process of evaluating the potential returns of an investment in fixed assets or long-term projects versus its costs.

Risk-Return Trade-Off

The principle that potential return rises with an increase in risk.