Match the type of risk with its correct definition:
-_____ Financial risk
A) The risk that the counterparty to the insurance contract will cancel the coverage earlier or later than expected when the contract price was determined
B) The risk that administrative costs to service the contract will unexpectedly increase
C) The risk arising from uncertainties other than financial risk that is transferred from the holder of an insurance contract to the issuer
D) The possibility that future changes in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, will impact expected cash flows

Question

Quizplus · Accepted Answer

Financial risk is associated with the uncertainty of future changes in variables like interest rates, commodity prices, or foreign exchange rates, which can affect expected cash flows.

Match the Type of Risk with Its Correct Definition