Diversifiable Risk Includes _____

question 59

Multiple Choice

Diversifiable risk includes _____.

• A) maturity risk
• B) liquidity risk
• C) business risk
• D) political risk
• E) interest rate risk

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Definitions:

Rate of Return

Variation in the worth of an investment over a specific interval, depicted as a percentage of the investment's initial outlay.

Discount Rate

The interest rate used to discount future cash flows to their present values.

Present Value

The current financial assessment of a sum of money in the future or ongoing cash flows, based on a specific rate of return.

Cash Flows

The movement of money into and out of a business, project, or financial product.