- CFA Exams
- CFA Level I Exam
- Study Session 11. Corporate Finance (2)
- Reading 34. Measures of Leverage
- Subject 1. Business Risk and Operating Leverage
CFA Practice Question
Increases and decreases in the level of sales are due to business risk. The business risk of a particular company is characterized by ______.
A. the level of risk assumed by the debt providers
B. operating leverage and uncertainty about demand, output prices, and competition
C. uncertainty about credit ratings, government debt, interest rates, and the demand for the domestic currency
Explanation: Business risk results from economic factors and operating leverage.
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