Which of the following is the best definition of risk profile?

Multiple Choice

• An option that gives the owner the right, but not the obligation, to sell an asset.

• A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.

• An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.

• A plot showing how the value of the firm is affected by changes in prices or rates.

• Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.