Which one of the following is an example of unsystematic risk?
A) The inflation rate increases unexpectedly.
B) The federal government lowers income taxes.
C) An oil tanker runs aground and spills its cargo.
D) Interest rates decline by one-half of one percent.
E) The GDP rises by 2% more than anticipated.

Question

Quizplus · Accepted Answer

Unsystematic risk refers to the risk that affects a specific company or industry, rather than the entire market or economy. The example of an oil tanker running aground and spilling its cargo is a specific event that would primarily affect the company owning the tanker and potentially the oil industry, but not the entire market or economy. This makes it an example of unsystematic risk.

Which One of the Following Is an Example of Unsystematic