Which of the Following Statements Is True About the Risk

question 37

Multiple Choice

Which of the following statements is true about the risk metrics?

• A)It is a system of related measures that help us measure the emotional aspects of risk.
• B)It is important but not critical because enterprises have alternative measures to see whether they have reached risk management objectives.
• C)It is an independent entity and can stand alone.
• D)It allows us to measure risk, giving us an ability to control risk and simultaneously exploit opportunities as they arise.
• E)The risk being considered in a particular situation does not dictate the risk measure used because they are standard for almost all risk types.

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Definitions:

Elasticity of Demand

An index indicating the degree to which demand for a product changes in response to a price change, where an elasticity greater than one signifies a high level of responsiveness.

Income Elasticity

A measure of how much the demand for a good or service changes with a change in consumers' income.

Most Elastic

Refers to the responsiveness of demand or supply to changes in price, with the most elastic being the most sensitive to price changes.

Perfectly Elastic

A situation in a market where the quantity demanded or supplied responds infinitely or disproportionately to changes in price.