The Risk That the Value of a Security Will Change

question 30

Multiple Choice

The risk that the value of a security will change due to issuer-specific factors and applies to interest rate and equity positions related to a specific issuer is:

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

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Definitions:

Misrepresentation

A false statement of fact made by one party to another, which has the effect of inducing that party into a contract.

Actual Fraud

Actual fraud refers to intentional deception or misrepresentation made by one party with the knowledge of its falsehood, intending to persuade another party to part with something of value or to surrender a legal right.

Constructive Fraud

A situation where dishonesty is presumed by the nature of the transaction, despite the absence of intent to deceive.

Innocent Misrepresentation

A false statement made without knowledge of its falsity, leading another to enter into a contract they otherwise might not have.