Market risk as being of primary importance


Problem: In theory the decision maker should view market risk as being of primary importance. However, within-firm, or corporate, risk is relevant to a firm's:

1) Well diversified stockholders, because it may affect debt capacity and operating income.

2) Management, because it affects job stability.

3) Creditors, because it affects the firms credit worthiness.

4) Statements a and c are correct.

5) All of the statements above are correct.

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Finance Basics: Market risk as being of primary importance
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