Recently an oil rig in the Gulf of Texas blew up causing the value of your stock in the company who owns the oil rig to fall.What type of risk does this represent?
A)Diversifiable risk
B)Systematic risk
C)Political and regulatory risk
D)Both B and C

Question

Quizplus · Accepted Answer

This event is an example of diversifiable risk because it is a specific risk that affects only the company owning the oil rig, not the entire market or economy. Diversifiable risks can be mitigated through diversification of an investment portfolio.

Recently an Oil Rig in the Gulf of Texas Blew