A Decrease in the Fair Value of a Security That

question 69

Multiple Choice

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n) :

• A) Unrealized loss.
• B) Market loss.
• C) Contingent loss.
• D) Realizable loss.
• E) Capitalized loss.

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Definitions:

Moral Hazard

A situation where one party takes risks because they know they will not have to bear the full consequences of their actions.

Divorce Insurance

A type of financial product designed to provide financial protection to individuals in case of a divorce, typically by paying a lump sum.

Marital Problems

Issues or conflicts arising between spouses that can affect the stability and health of the marriage.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in a contract, often seen in insurance markets.