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Which of the following is the best definition of risk profile? A plot showing how the value of the firm is affected by changes in

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

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

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

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

  • 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.

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