Which of the Following Statements Concerning Risk Are Correct

question 8

Multiple Choice

Which of the following statements concerning risk are correct?
i.Systematic risk is measured by beta.II.The risk premium increases as unsystematic risk increases.III.Systematic risk is the only part of total risk that should affect asset prices and returns.IV.Diversifiable risks are market risks you cannot avoid.

• A) I and III only
• B) II and IV only
• C) I and II only
• D) III and IV only
• E) I,II,and III only

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Definitions:

Cash Receipts

The collection of money, typically from sales or services, recorded in the financial accounting records.

Budgeted Materials

Estimated quantities and costs of materials required for production within a specific time frame.

Raw Materials Inventory

This inventory consists of the basic materials and components that are used in the manufacturing process to produce finished goods.

Budgeted Production

Forecasted amount of products a company plans to produce over a specific period, based on its budget.