Operating Risks

question 42

Multiple Choice

Operating risks

• A)include variability in sales from changing economic conditions (cyclicality risk).
• B)include variability in sales from short product life cycles (because of technological change or changes in consumer taste).
• C)include variability of earnings that arises when the firm has a high proportion of fixed costs that do not change as sales change.
• D)Answers a, b, and c are correct.
• E)None of these answer choices is correct.

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Definitions:

Prototype

The object that has the greatest number of attributes characteristic of the concept and that is therefore the most typical member of that concept.

Attribute

A feature of an object or event that varies from one instance to another.

Genotype

The genetic makeup of an individual organism, consisting of the inherited alleles that dictate traits or characteristics.

Locus Coeruleus

Central nervous system structure that plays a key role in arousal and wakefulness.