Many former employees at Enron, an energy trading and supply company, had a large part of their portfolio invested in Enron stock. These employees were bearing a high degree of ________ risk.

Question

Quizplus · Accepted Answer

Unsystematic risk refers to the risk that is inherent in a specific company or industry. In the case of Enron, the employees' investments were highly concentrated in one company's stock, exposing them to the unique risks associated with that company's performance, which is a classic example of unsystematic risk.

Many Former Employees at Enron, an Energy Trading and Supply