Which of the Following Is the Best Definition of Risk

question 172

Multiple Choice

Which of the following is the best definition of risk profile?

• A) A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.
• B) An option that gives the owner the right, but not the obligation, to sell an asset.
• C) A plot showing how the value of the firm is affected by changes in prices or rates.
• D) An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
• E) Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.

---

Definitions:

Feudal Societies

Societies characterized by a hierarchical system of governance based on land ownership and service, prevalent in medieval Europe.

Charismatic Authority

Charismatic authority is a type of leadership where the leader's influence is based on their personal charm and the devotion they inspire in their followers, rather than traditional or legal power.

Higher Authority

An entity or individual possessing greater power, control, or influence over others, often used in the context of organizational decision-making or religious belief.

Uncommon People

Individuals who are rare or exceptional in their characteristics, behaviors, or achievements, standing out from the general population.