Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 2 of 17
Financial risk arises from ______.
B. the use of debt in the capital structure
C. the extent to which the costs of production are fixed
A. demand (unit sales) variability
B. the use of debt in the capital structure
C. the extent to which the costs of production are fixed
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | Financial risk is governed by the amount of debt in the firm |
| sarath | Financial risk is governed by hte use of fixed income securities...like debt and preferred stocks. |
| johntan1979 | A: Sales risk C: Operating risk |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
define and explain leverage, business risk, sales risk, operating risk, and financial risk and classify a risk;
calculate and interpret the degree of operating leverage, the degree of financial leverage, and the degree of total leverage;
analyze the effect of financial leverage on a company's net income and return on equity;
CFA® 2024 Level I Curriculum, Volume 4, Module 35.