Multiple choice

A business venture is typically characterised by 'uncertainty of return'. Which of the following best express(es) the meaning of this term?

a. Lack of certainty associated with exposure to loss caused by an unfavourable or undesirable event. b. Trying to maximise profits by increasing sales and reducing costs. c. Lack of knowledge relating to the amount of money that the business is going to earn in a given period.

  1. Only a

  2. Only b

  3. Only c

  4. Only a and b

  5. Only b and c
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period. Every business invests money or capital to run its activities with the objective of earning profit. But it is not certain as to what amount of profit will be earned. Also, there is always a possibility of losses being incurred, in spite of the best efforts put into the business.

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