Risk Is

question 132

Multiple Choice

Risk is:

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

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Definitions:

Cost of Goods Sold

The total cost directly involved in manufacturing or acquiring the products sold by a company during a particular period.

Acid Test Ratio

A liquidity ratio; those assets that are most easily converted to cash are divided by current liabilities to indicate ability to pay off short-term debt. Also called quick ratio.

Quick Assets

Assets that can be quickly converted into cash without significantly affecting their value, such as stocks and receivables.

Current Liabilities

Current liabilities are a company's debts or obligations that are due to be paid within a year, including accounts payable, short-term loans, and accrued expenses.