Chapter 17 Flashcards
1
Q
What is leverage?
A
Leverage is the use of borrowed funds to purchase assets or to finance an investment
1
Q
What is risk?
A
Risk is the chance of unfavorable events or outcomes
2
Q
What type of risk can be offset with insurance?
A
Static risk
3
Q
What kind of risk is where a quick sale might not be possible or that a significant price reduction will be required to achieve a quick sale?
A
Liquidity risk
