Which risk is characterized by losses resulting from an individual’s actions rather than economic changes?

The choice that refers to losses resulting from an individual’s actions rather than economic changes is particular risk. This type of risk is associated with specific events or actions that impact an individual or a specific asset rather than the broader economic environment. For instance, particular risk may arise from factors such as negligence, accidents, or specific management decisions that affect a company or investment.

This differentiates particular risk from other types of risks, such as market risk, which pertains to the potential for losses due to broader economic fluctuations and market movements. Static risk generally refers to risks that do not change over time, often involving predictable and consistent factors, while dynamic risk involves changing circumstances which can be influenced by external factors. Understanding these distinctions helps investors and stakeholders manage their portfolios and mitigate specific risks effectively.