What Type of Risk Focuses Upon Future Contingencies

question 9

Multiple Choice

What type of risk focuses upon future contingencies?

• A)Liquidity risk.
• B)Interest rate risk.
• C)Credit risk.
• D)Foreign exchange rate risk.
• E)Off-balance sheet risk.

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Definitions:

Economic Efficiency

A situation in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Social Insurance Programs

Programs that replace the earnings lost when people retire or are temporarily unemployed, that are financed by payroll taxes, and that are viewed as earned rights (rather than charity).

Means Tests

Evaluations used to determine an individual's eligibility for certain financial or social assistance based on their income or assets.

Social Insurance Programs

Government-sponsored programs that provide financial protection to individuals against economic risks such as unemployment, illness, and old age.