Managers should under no conditions take actions that increase their firm's risk relative to the market, regardless of how much those actions would increase the firm's expected rate of return.

Question

Quizplus · Accepted Answer

This statement is not entirely true. Managers are expected to take calculated risks in order to increase a firm's rate of return and remain competitive in the market. However, these risks should be measured and managed effectively to minimize potential losses. It is the responsibility of the managers to strike a balance between risk and return, ensuring the company is not exposed to excessive risks that could negatively affect the company's financial position.

Managers Should Under No Conditions Take Actions That Increase Their