Business Risk vs. Sales Risk

CFA Level I Corporate Finance
#1

Hello All,

I am not sure about this one – can you please help me?

If two companies have exactly same sales volume and operating risk, they are likely to have identical ____

a) sales risk

b) business risk

c) operating leverage

OA is C. Why not A or B? Business risk = Sales Risk (SR) + Operating Risk (OR). OR is same. SR seems same. So business risk should be the same. Right?

Please help me.

Thanks in advance.

#2

Anyone? Please let me know your thoughts. Thanks in advance.

#3

I am sorry for bouncing this thread. I hope someone would help me.

Thanks in advance.

#4

Business risk and sales risk is not depended upon the volume and operating risk.

But the leverage could be the same because it depends on the size and volume of the company