Uninsurable Risks Are Considered ________ Risk

question 38

Multiple Choice

Uninsurable risks are considered ________ risk.

• A)property
• B)liability
• C)speculative
• D)pure
• E)personal

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Definitions:

Internal Rate

Commonly known as the Internal Rate of Return (IRR), it represents the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Modified Internal Rate

A version of the internal rate of return (IRR) adjusted for scale and risk, providing a more accurate reflection of an investment's profitability.

Cost of Capital

The critical rate of return a firm is required to earn on investment projects to hold its market stance and entice financiers.

NPV Method

Net Present Value method, a financial analysis tool used to determine the value of an investment by discounting future cash flows to their present value.