Which of the following is correct regarding the total risk of a company?
A) A company can change its risk level over time.
B) Some firms are riskier because they offer many different products and/or services.
C) Companies can change their risk by reducing the amount of money they have borrowed.
D) None of these statements are correct.

Question

Quizplus · Accepted Answer

The total risk of a company is not fixed and can change over time due to various factors such as changes in the economic environment, competition, management decisions, and other external and internal factors. Therefore, option A is correct. Option B is incorrect as offering many different products/services does not necessarily make a company riskier. Option C is also incorrect as reducing borrowed money can lower financial risk, but it may not lower other types of risks a company faces.

Which of the Following Is Correct Regarding the Total Risk