Moving to another question will save this response. Question 10 Which of the following is true about the degree of operating leverage? Operating leverage is higher if fixed operating costs are high relative to variable operating costs Higher operating leverage increases the sensitivity of operating income to changes in sales Operating leverage magnifies both profits and losses, helping in the good times and causing pain in the bad times All of the above Moving to another question will save this response. Moving to another question will save this response. Question 12 What does the beta measure? unsystematic risk. systematic risk diversifiable risk company-specific risk L A Moving to another question will save this response. Moving to another question will save this response. Question 14 Why do we use Capital Asset Pricing Model (CAPM)? because it is impractical to account for the correlations of thousands of possible investments because CAPM assumes that investors choose to hold the least diversified portfolio that includes all risky investments because the relevant risk of an investment is determined by how it contributes to the risk of this individual portfolio All of the above Moving to another question will save this response