Which of the following is a diversifiable risk?
A)the risk that oil prices rise,increasing production costs
B)the risk that the economy slows,reducing demand for your firm's products
C)the risk that your new product will not receive regulatory approval
D)the risk that the Bank of Canada raises interest rates
E)the risk that a new government is elected and raises corporate taxes

Question

Quizplus · Accepted Answer

The risk that a new product will not receive regulatory approval is specific to the company and can be diversified by investing in multiple companies with different products or industries. This type of risk is also known as company-specific risk or unsystematic risk. The other risks listed are market-related and cannot be diversified away, making them non-diversifiable or systematic risks.

Which of the Following Is a Diversifiable Risk