The Risk Involved in Owning a Financial Asset Is Best

question 39

Multiple Choice

The risk involved in owning a financial asset is best thought of as

• A)equal to the interest received from ownership of the asset.
• B)the chance that the value of the asset will rise or fall relative to what you expect.
• C)equal in most instances to the liquidity of the asset.
• D)the difference between the return on the asset after taxes and the return on a similar tax-free asset.

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Definitions:

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior conditioning or learning.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, first described by Ivan Pavlov.

Loud Noise

High decibel sounds that can range from causing mild discomfort to potentially harming hearing health.

Prevalence

The proportion of a population found to have a certain condition or characteristic at a specific time.