How Does High Business Risk Affect Firm Risk

question 12

Multiple Choice

How does high business risk affect firm risk?

• A)Higher business risk increases the volatility of capital structure.
• B)Higher business risk increases the volatility of EBIT.
• C)Higher business risk increases the volatility of financial costs.
• D)Higher business risk increases the volatility of the firm's asset structure.

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Definitions:

Prejudice

An opinion or judgment formed in advance about an individual or object without logical grounds or firsthand experience.

Discrimination

Unfair or prejudiced treatment of individuals based on their characteristics, such as race, age, sex, or sexual orientation.

Stereotyping

The act of assigning a fixed set of characteristics to members of a particular group, often oversimplifying individual differences and promoting generalizations.

Robber's Cave Experiment

A study on intergroup conflict and cooperation conducted in 1954 by social psychologist Muzafer Sherif, highlighting the ease of inducing conflict and the effectiveness of superseding goals in reducing it.