The Risk of Loss Owing to Changes in the General

question 45

Multiple Choice

The risk of loss owing to changes in the general level of market prices or interest rates, arising from positions in interest rate, equities, foreign exchange and commodities is:

• A)specific risk
• B)general market risk
• C)beta
• D)total risk

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Definitions:

Straight-Line Method

A method of depreciation that allocates an asset's cost evenly throughout its useful life.

Carrying Amount

The value at which an asset or liability is recognized on the balance sheet, calculated as its original cost minus depreciation or amortization.

Useful Life

The period over which an asset is expected to be available for use by an entity; or the number of production or similar units expected to be obtained from the asset by an entity.

Management Fee

A charge levied by an investment manager for managing an investment fund's assets, often calculated as a percentage of the assets under management.