Which of the Following Is Not an Example of a Mitigating

question 43

Multiple Choice

Which of the following is not an example of a mitigating factor that reducthe risk that the going concern assumption may be in doubt?

• A) The ability to raise additional funds via borrowings
• B) A letter of guarantee from a parent company
• C) The ability to sell an unprofitable segment of the business
• D) Significant rapid increase in competition

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Definitions:

Annualized Return

A rate of return that standardizes an investment's earnings to a one-year period, making comparison with other investments easier.

Holding Period

The length of time an investment is held by an investor before being sold.

Riskless Arbitrage

A financial strategy that aims to profit from discrepancies in the price of identical or similar financial instruments on different markets or in different forms without risk.

Spot Oil Prices

The current market price at which oil can be bought or sold for immediate delivery.