A point to keep in mind is that financial managers should consider taking less financial risk when operating risk is high,but may consider taking more financial risk when operating risk is low.

Question

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This statement is true because when operating risk is high, there is already a high level of uncertainty in the company's environment, so taking on additional financial risk can further increase the company's overall risk. Conversely, when operating risk is low, the company may have more capacity to take on additional financial risk because there is less uncertainty in the environment.

A Point to Keep in Mind Is That Financial Managers