Risk in Financial Assets Only Occurs When There Is a Chance

question 12

True/False

Risk in financial assets only occurs when there is a chance that the actual return is less than expected.It is not considered risk if there is a chance that the actual return is greater than expected.

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Definitions:

Risk-Free Asset

An investment with a guaranteed return and no possibility of default, typically associated with government bonds.

Market Return

The total gain or loss on an investment over a specified period, including dividends and capital gains.

Systematic Risk

It represents the risk inherent to the entire market or market segment, often influenced by factors such as economic, political, or social changes.

Treasury Bills

Short-term government securities issued at a discount from the par value and paying no interest, maturing in one year or less, representing a secure, liquid investment.