Knowing the Available Resources and the Policies and Procedures of Agencies

question 3

Multiple Choice

Knowing the available resources and the policies and procedures of agencies are useful to the:

• A) caregiver.
• B) broker.
• C) monitor.
• D) evaluator.

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Definitions:

Risk-To-Reward Ratio

A benchmark used by investors to gauge the prospective returns of an investment in comparison to the risk associated with securing those returns.

Efficient Market

A type of market where all relevant information is rapidly and correctly reflected in securities prices, allowing them to be bought and sold at their fair value.

Systematic Risk

Market or sector-wide risk, commonly called market risk, that remains despite attempts at diversification.

Unsystematic Risk

The risk associated with a specific company or industry, which can be reduced through diversification, unlike systematic risk which affects the entire market.