Risk

question 102

Multiple Choice

Risk

• A)can be reduced by placing a large number of small bets rather than a small number of large bets.
• B)can be reduced by increasing the number of stocks in a portfolio.
• C)Both A and B are correct.
• D)Neither A nor B are correct.

---

Definitions:

Profit After Tax

The net income a company remains with after all expenses, including taxes, have been subtracted from total revenue.

Sales Revenue

The income from sales of goods or services before any costs or expenses are deducted.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profit.

CVP Model Assumptions

Assumptions underlying Cost-Volume-Profit analysis, including constant sales price, variable and fixed costs, and operating efficiency.