The risk that the rate of return on an investment will be less than expected due to factors that are independent of the investment, such as political, social or economic events, is called
A) business risk.
B) financial risk.
C) market risk.
D) liquidity risk.

Question

Quizplus · Accepted Answer

Market risk is the risk associated with fluctuations in the overall market due to economic, political, or social changes. This risk cannot be diversified away and affects all investments to some degree. Business risk relates to the specific operations and performance of a company, financial risk relates to the use of debt or other financial instruments, and liquidity risk is the risk of not being able to sell an asset quickly enough to meet financial obligations.

The Risk That the Rate of Return on an Investment