A plot showing the gains and losses that will occur on a ﬁnancial asset as a result of unexpected price changes is called a _______________.

Question

Quizplus · Accepted Answer

A plot showing the gains and losses that will occur on a financial asset as a result of unexpected price changes is called a payoff profile. The risk profile shows the level of risk associated with an investment in terms of potential losses, and is not a plot. The Security Market Line is a graphical representation of the CAPM model, which shows the relationship between expected return and systematic risk, and is not a plot of gains and losses. A scatter plot is a graphic representation of data points on two variables, and is not a plot of gains and losses either. A normal distribution is a statistical distribution of data that is symmetrical and bell-shaped, and is not a plot of gains and losses either.

A Plot Showing the Gains and Losses That Will Occur