Which of the Following Statements Related to Financial Risk Are

Multiple Choice

Which of the following statements related to financial risk are correct?
I.Financial risk is the risk associated with the use of debt financing.
II.As financial risk increases so too does the cost of equity.
III.Financial risk is wholly dependent upon the financial policy of a firm.
IV.Financial risk is the risk that is inherent in a firm's operations.

A) I and III only
B) II and IV only
C) II and III only
D) I, II, and III only
E) I, II, III, and IV