Which one of the following is an example of a nondiversifiable risk?
A) a well respected chief executive of a firm suddenly resigns
B) a well respected chairman of the European Central Bank suddenly resigns
C) a key employee suddenly resigns and accepts employment with a key competitor
D) a well managed firm reduces its work force and automates several jobs
E) a poorly managed firm suddenly goes out of business due to lack of sales
Correct Answer:
Verified
Q1: The amount of systematic risk present in
Q3: When computing the expected return on a
Q5: The principle of diversification tells us that:
A)concentrating
Q7: Risk that affects at most a small
Q8: Risk that affects a large number of
Q9: You are considering purchasing share S.This share
Q10: The linear relation between an asset's expected
Q11: The slope of an asset's security market
Q18: The characteristic line is graphically depicted as:
A)the
Q20: The percentage of a portfolio's total value
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