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

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, is considered a non-diversifiable or systematic risk because it potentially affects all companies and cannot be mitigated just by diversifying a portfolio.

Which of the Following Is NOT a Diversifiable Risk