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 is also called unique or diversifiable risk, which affects a specific company, industry, or sector. An example of such a risk is the oil tanker running aground and spilling its cargo, which would only affect the company that owns the tanker, and not the entire market. Choices A, B, D, and E are examples of systematic risk, which affects the entire market and cannot be diversified away.

Which One of the Following Is an Example of Unsystematic