Recent Lessons

Show all results for ""

Investment Risk Types Quiz

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Download our mobile app to listen on the go

Get App

Questions and Answers

Which type of risk is also called specific risk and is associated with uncertainties of an investment within a particular firm or industry?

Market risk
Systematic risk
Unsystematic risk (correct)
Principal risk

What type of risk is associated with macroeconomic factors and affects all securities in a portfolio?

Systematic risk
Unsystematic risk
Market risk (correct)
Specific risk

What is the principal risk associated with investments?

Market risk
Inflation risk (correct)
Interest rate risk
Currency risk

Which type of investment vehicle is exempt from principal risks?

Savings accounts (A) Signup and view all the answers

What is the purpose of creating a benchmark index in portfolio management?

To measure the investment's performance against a standard (A) Signup and view all the answers

What is the purpose of investing in different currencies to reduce portfolio risk?

To reduce currency risk (B) Signup and view all the answers

How can portfolio managers reduce purchasing power risk due to inflation?

By including fixed-income securities in the portfolio (B) Signup and view all the answers

What does a beta value greater than one indicate about a stock's volatility?

The stock is more volatile than the overall market (C) Signup and view all the answers

What does standard deviation measure in terms of investment risks?

The consistency of an investment’s earnings (D) Signup and view all the answers

How does a negative beta value for a stock behave in relation to market movements?

It tends to rise in value when the market falls (A) Signup and view all the answers

Flashcards are hidden until you start studying