According to the International Professional Practices Framework, Risk Is

question 189

Multiple Choice

According to the International Professional Practices Framework, risk is:

• A) Defined as the negative effect of events that are expected to occur. II. Measured in terms of consequences. III. Measured in terms of likelihood.
• B) I only
• C) I and II only
• D) II and III only
• E) I, II, and III.

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Definitions:

Real Rate of Return

The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects.

Portfolio

A portfolio represents a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Compounded Semiannually

Interest calculation method where interest is added to the principal on a semiannual basis, leading to interest on interest in the second half of the year.