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:

Protect

To legally defend or safeguard an individual, group, or entity from harm or legal infringement.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty providing a uniform international sales law.

International Sales

The process of selling goods or services to customers in different countries, subject to international trade laws and agreements.

Obligations

Obligations or commitments required by law, agreement, or moral principles that one entity must fulfill towards another.