question What investment approach involves purchasing a diversified portfolio to match the overall market performance

What term is used to describe the analysis of potential risks to determine their nature and characteristics?

A. Risk Analysis
B. Risk Identification
C. Risk Mitigation
D. Compliance Risk

What term refers to the legal reduction of tax liability through planning and legitimate financial strategies?

A. Tax Evasion
B. Tax Compliance
C. Tax Planning
D. Tax Reform

Which type of risk refers to the potential for loss or harm related to the use of technology and information systems?

A. Operational Risk
B. Financial Risk
C. Cybersecurity Risk
D. Strategic Risk

What is the term for the legal reduction of tax liability by reducing the taxable income through various allowable expenses?

A. Tax Credits
B. Tax Exemptions
C. Tax Deductions
D. Tax Liability

Which tax is imposed on the added value of a product at each stage of its production and distribution cycle?

A. Corporate Tax
B. Value Added Tax (VAT)
C. Excise Tax
D. Income Tax

What does the term "Hedging" mean in financial management?

A. Diversifying investments
B. Reducing exposure to financial risk
C. Maximizing profits
D. Asset Management

What does the term "Wealth Maximization" mean in financial management?

A. Maximizing profits
B. Maximizing shareholder wealth
C. Minimizing costs
D. Achieving market dominance

What financial metric assesses the company's ability to meet its short-term obligations using its most liquid assets?

A. Quick Ratio
B. Profit Maximization
C. Financial Ratios
D. Liquidity Management

What term refers to the practice of using financial instruments to protect against the risk of adverse price movements in the market?

A. Hedging
B. Financial Planning
C. Working Capital Management
D. Dividend Policy

The Horizontal Analysis of financial statements compares data across:

A. Different industries
B. Different time periods
C. Different market segments
D. Different geographical regions