Measuring risk associated with making most financial decisions is difficult because of what factor(s)?
A)Inflation risk
B)Interest Rate risk
C)Personal risk
D)Liquidity risk
E)All of these.

Question

Quizplus · Accepted Answer

All of these factors contribute to the difficulty of measuring risk in financial decisions. Inflation risk refers to the possibility that the increase in prices will reduce the purchasing power of money over time. Interest rate risk refers to the possibility that changes in interest rates will affect the value of investments. Personal risk refers to the possibility that unforeseen events, such as illness or job loss, will affect a person's ability to pay back debt or make future financial decisions. Liquidity risk refers to the possibility that an asset cannot be quickly sold without a significant loss in value. Understanding and accounting for all of these factors is essential in accurately measuring risk associated with financial decisions.

Measuring Risk Associated with Making Most Financial Decisions Is Difficult