Which of the following is NOT related to (or contributes to) business risk? Remember that a company's activities have an effect on its business risk. O Sales price variability. O The extent to which operating costs are fixed. Demand variability. O Input price variability. The extent to which interest rates on the firm's debt fluctuate.
Which of the following is NOT related to (or contributes to) business risk? Remember that a company's activities have an effect on its business risk. O Sales price variability. O The extent to which operating costs are fixed. Demand variability. O Input price variability. The extent to which interest rates on the firm's debt fluctuate.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 3MCQ
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Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
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