A company's stock price dropped when it announced that its revenue had decreased because of the quality issues of its products. This is an example of ________.
A) market risk
B) unsystematic risk
C) systematic risk
D) undiversifiable risk

Question

Quizplus · Accepted Answer

The drop in the company's stock price is due to the quality issues of its products, which is a company-specific risk, known as unsystematic risk. It is not related to market conditions or macroeconomic factors (systematic risk). Undiversifiable risk refers to risk that cannot be eliminated through diversification, which is not applicable in this scenario.

A Company's Stock Price Dropped When It Announced That Its