ARM 401 - Chapter 9 Solved 100% Correct 2023

Market Risk - ANSWER-Uncertainty about an investment's future value because of potential changes in the market for that type of investment. Interest Rate Risk - ANSWER-The risk that a security's future value will decline because of changes in interest rates. Exchange Rate Risk - ANSWER-Uncertainty about an investment's value because of potential changes in the exchange rate between currencies. Liquidity Risk - ANSWER-The risk that an asset cannot be sold on short notice without incurring a loss. Forward Contract - ANSWER-A contract that obligates one party to buy and another party to sell a specific financial instrument or physical commodity at a specified future date and price. Credit Risk - ANSWER-The risk that customers or other creditors will fail to make promised payments as they come due. Counterparty Risk - ANSWER-The risk that the other party to an agreement will default. Price Risk - ANSWER-The potential for a change in revenue or cost because of an increase or a decrease in the price of a product or an input. Balance Sheet - ANSWER-a snapshot of a business's financial position at a particular moment in time Assets - ANSWER-the resources an organization owns or uses to operate its business. Current Assets - ANSWER-cash and other assets that are expected to be converted to cash within a year. Noncurrent Assets - ANSWER-assets that will be used over a period greater than one year Depreciation - ANSWER-an accounting term used to describe allocation of a noncurrent tangible asset's value over its useful life. Liabilities - ANSWER-the debts and obligations that represent claims against an organization's assets.