The six principles of finance include all of the following except:
A) Money has a time value.
B) Higher returns are expected for taking on more risk
C) Diversification of investments can reduce risk
D) Larger capital amounts are charged higher interest

Question

Quizplus · Accepted Answer

The six principles of finance are money has a time value, higher returns are expected for taking on more risk, diversification of investments can reduce risk, financial markets are efficient in pricing securities, the goal of a corporation is to maximize shareholder value, and conflicts of interest can arise between shareholders and managers. The statement "larger capital amounts are charged higher interest" is not one of the six principles.

The Six Principles of Finance Include All of the Following