Portfolio Risk Management & Risk Management Plan


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question 1 of 3

_____ is used when collecting and analyzing the risks of portfolio investments.

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1. When the value of an investment falls in response to an increase in the interest rate, this is called _____ risk.

2. When Linda keeps enough of her portfolio back so that she doesn't absorb more risk than her investments are worth, she is keeping a _____.

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About This Quiz & Worksheet

See what you know about portfolio risk management. Take this multiple-choice quiz and answer questions on key points like the term for gathering and evaluating portfolio investment risks and a type of risk that involves the value of an investment falling because of an interest rate increase.

Quiz & Worksheet Goals

Test yourself in these areas:

  • Strategy that requires keeping some portfolio back in order to avoid absorbing more risk than your investments are worth
  • The main aspect(s) of governance risk
  • Type of risk one takes on when a bond can't be paid when due

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about the strategy that requires keeping some portfolio back so as to avoid taking on more risk than investments are worth and a type of risk incurred when a bond can't be repaid
  • Making connections - use your understanding of the value of an investment and an increase in an interest rate
  • Information recall - access the knowledge you've gained regarding the main focus of governance risk

Additional Learning

Consider the accompanying lesson we've called Portfolio Risk Management & Risk Management Plan to learn more about these key areas:

  • Definition of investment risk
  • Portfolio risk examples
  • Liquidity as a symbol of financial stability