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22 May, 01:09

Which of the following is an example of nondiversifiable risk? (a) Risk resulting from a general decline in the stock market (b) Risk resulting from a news release that management has committed fraud (c) Risk resulting from an explosion in a grain elevator owned by Continental (d) Risk resulting from an impending lawsuit against the company

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  1. 22 May, 01:23
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    (a) Risk resulting from a general decline in the stock market

    Explanation:

    A non-diversified risk is an investment asset or a bond a real estate stocks that can be reduced or eliminated by addition of an asset that diversifies the investments. It can be also referred to as a market or a systematic risk and can be understood as an investment risk that are unavoidable lie natural disasters, wars or epidemics. Some factors responsible of this are changes in the foreign investment policy and alteration of taxes, social-economic measured and global security threats.
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