Which one of the following is an example of diversifiable risk?
A) A decrease in the average cost of living.
B) An increase in the prime interest rate.
C) An increase in the minimum hourly wage.
D) A new government regulation on aircraft engines.
E) A decrease in federal income taxes on business incomes.

Question

Quizplus · Accepted Answer

Diversifiable risk refers to the risk that affects a specific company or industry rather than the entire market or economy. A new government regulation on aircraft engines is an example of a risk that can impact specific companies (those in the aircraft or related industries) rather than the whole market, making it a diversifiable risk.

Which One of the Following Is an Example of Diversifiable