The risk that occurs because stock prices fluctuate is called ________.
A) stock market risk
B) reinvestment risk
C) interest-rate risk
D) default risk

Question

Quizplus · Accepted Answer

Stock market risk occurs due to the fluctuation in stock prices, which can lead to gains or losses for the investor. Reinvestment risk refers to the risk of not being able to reinvest cash flows at the same rate of return, interest-rate risk pertains to changes in interest rates affecting the investment's value, and default risk is the risk of the issuer of a security not being able to pay back the principal or interest.

The Risk That Occurs Because Stock Prices Fluctuate Is Called