Sources of risk for an investment include
A) Variance of returns and business risk
B) Coefficient of variation of returns and financial risk
C) Business risk and financial risk
D) Variance of returns and coefficient of variation of returns
E) All of the above

Question

Quizplus · Accepted Answer

Business risk and financial risk are both major sources of risk for an investment. Business risk is related to the specific operations and characteristics of a company, while financial risk includes factors such as leverage and interest rate fluctuations. The other choices may also be relevant, but do not cover all the major sources of risk.

Sources of Risk for an Investment Include