If company A, a medical research company, makes a new product discovery and their stock rises 5%, this will have:
A)no effect on Company B's, a newspaper, stock price because it is a systematic risk element.
B)no effect on Company B's, a newspaper, stock price because it is an unsystematic risk element.
C)a large effect on Company B's, a newspaper, stock price because it is a systematic risk element.
D)a large effect on Company B's, a newspaper, stock price because it is an unsystematic risk element.
E)None of the above.

Question

Quizplus · Accepted Answer

The new product discovery by Company A is specific to their industry and does not affect Company B's newspaper industry. Therefore, it is an unsystematic risk element and would not have an effect on Company B's stock price.

If Company A, a Medical Research Company, Makes a New