Operating Risks

Multiple Choice

Operating risks

A) include variability in sales from changing economic conditions (cyclicality risk) .
B) include variability in sales from short product life cycles (because of technological change or changes in consumer taste) .
C) include variability of earnings that arises when the firm has a high proportion of fixed costs that do not change as sales change.
D) Answers a, b, and c are correct.
E) None of these answer choices is correct.