Business Risk: What is Not Associated with Business Risk? | CFA® Level 1 Exam Prep

What is Not Associated with Business Risk?

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Question

Business risk is concerned with the operations of the firm. Which of the following is not associated with (or not a part of) business risk?

Answers

Explanations

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A. B. C. D. E.

B

Business risk depends on:

(1) unit sales variability,

(2) sales price variability,

(3) input price variability,

(4) ability to adjust output prices for changes in input prices and,

(5) the extent to which costs are fixed (operating leverage).