Which of the following statements about risk is/are correct?
I. Risk is the possibility that the actual cash flows will be different that the expected cash flows.
II. Risk management is utilized by companies in order to provide a chance to make a quick profit.
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Statement I is correct - risk is defined as the possibility that actual cash flows will be different from expected cash flows. Statement II is incorrect - risk management is utilized by companies in order to minimize risk, not to provide a chance to make quick profits.

Which of the Following Statements About Risk Is/are Correct