Business risk is best measured after the fact as:
A) volatility added by interest expense.
B) volatility of operating income.
C) the operating leverage of the firm.
D) the systematic risk of the firm.

Question

Quizplus · Accepted Answer

Business risk is best measured as the volatility of operating income because it reflects the uncertainty associated with a firm's core operations before considering the effects of financial structure, such as interest expense or leverage.

Business Risk Is Best Measured After the Fact As