All of These Are Risk Management Techniques Except

question 20

Multiple Choice

All of these are risk management techniques except:

• A) Dollar Cost Averaging
• B) Constant Ratio Plan
• C) Writing Covered Calls
• D) Writing Uncovered Calls

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Definitions:

Correlation Risk

The potential for financial loss due to changes in the relationship or correlation between the performances of two or more assets.

Diversified Risk

Diversified risk refers to the reduction of risk in an investment portfolio by allocating investments among various financial instruments, industries, or other categories.

Systematic Risk

This is the exposure to uncertainty faced by all investments in a market or a sector, and is also recognized as market risk or non-diversifiable risk.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the market as a whole.