Risk Is

question 78

Multiple Choice

Risk is:

• A)Net income divided by average total assets.
• B)The reward for investment.
• C)The uncertainty about the expected return that will be earned from an investment.
• D)Unrelated to expected return.
• E)Derived from the idea of getting something back from an investment.

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Definitions:

Current Assets

Assets that are expected to be converted into cash or used up within one year or one business cycle, whichever is longer, such as cash, inventory, and receivables.

Cash Flow To Creditors

The amount of cash a company pays to its creditors and bondholders, indicating the flow of cash intended to cover debts.

Operating Cash Flow

Operating cash flow is a measure of the cash generated by a company's normal business operations, indicating its ability to cover operating expenses and invest in its business.

Net New Borrowing

The difference between the total amount of debt a company takes on and the amount it repays within a specific period, indicating the net increase in debt.