Economists Define Risk as

question 32

Multiple Choice

Economists define risk as

• A)the difference between the interest rate borrowers pay and the interest rate lenders receive.
• B)the degree of uncertainty of an asset's return.
• C)the ease with which an asset can be exchanged for other assets or for goods and services.
• D)the difference between the return on common stock and the return on corporate bonds.

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Definitions:

Obligation

A duty or commitment to pay money or perform some action.

Equivalent

Equal in value, amount, function, meaning, or status; often used in mathematics to describe expressions or amounts that are the same when compared or evaluated.

Compounded Quarterly

Refers specifically to the computation of interest at four intervals in a year, on the initial investment alongside the interest from preceding periods.

Repaid

The act of paying back money previously borrowed from a lender.