Which of the following is NOT a diversifiable risk?
A)The risk of a product liability lawsuit
B)The risk that oil prices rise, increasing production costs
C)The risk of a key employee being hired away by a competitor
D)The risk that the CEO is killed in an aeroplane crash

Question

Quizplus · Accepted Answer

Diversifiable risks, also known as unsystematic risks, are specific to a company or industry and can be mitigated through diversification. The risk that oil prices rise, increasing production costs (B), is considered a non-diversifiable or systematic risk because it affects nearly all companies and industries to some extent and cannot be eliminated through diversification.

Which of the Following Is NOT a Diversifiable Risk