Final answer:
The tool used to assess various risk characteristics is a Risk Assessment Tool, which is essential in analyzing the tradeoffs between return and risk in financial investments. Cost Benefit Analysis also plays a role in weighing the costs against the benefits of decisions.
Step-by-step explanation:
The tool used to gather and determine individual assessments of various characteristics of risk including frequency of occurrence, degree of impact, loss, or gain for the organization, and degree of efficacy of current controls is often referred to as a Risk Assessment Tool. This tool is integral in understanding the tradeoffs between return and risk, which is a fundamental concept in financial investments. Investments are evaluated based on their expected rate of return, risk, and liquidity. The process of assessing risks is crucial to making informed decisions and ensuring actuarial fairness within risk groups.
Moreover, when making choices regarding investments or any financial decision, a Cost Benefit Analysis can be employed. This involves comparing the pros and cons of a decision, or the costs and benefits—where costs could be in terms of money, effort, and other sacrifices, and benefits represent what is gained, such as money, time, experience, etc.