Which of the Following Scenarios Carries the Least Risk of NOT

question 110

Multiple Choice

Which of the following scenarios carries the least risk of NOT being able to meet required payments (capital expenditure, dividend, interest and principal requirements) totaling $96 million?

• A) Expected cash flow, $116 million, standard deviation $5 million
• B) Expected cash flow, $107 million, standard deviation $5.5 million
• C) Expected cash flow, $112 million, standard deviation $8 million
• D) Expected cash flow, $134 million, standard deviation $38 million

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Definitions:

Price

is the amount of money expected, required, or given in payment for something, reflecting the value that must be exchanged to obtain a good or service.

Quantity Demanded

The cumulative quantity of a product or service that buyers are ready and capable of buying at a certain price within a given timeframe.

Surplus

The situation where the quantity of a good or service supplied exceeds the quantity demanded, often resulting in a decrease in price.

Price

The amount of money required to purchase a good or service, often determined by the interaction of supply and demand.