Which Is the Best Example of a Nondiversifiable Risk for Stalwart

question 62

Multiple Choice

Which is the best example of a nondiversifiable risk for Stalwart Shoes?

• A) A project to open a new store in Texas
• B) A project to open a new factory in Texas
• C) A project to move into the sock market
• D) The state of the economy in Texas
• E) The state of the U.S. economy

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Definitions:

Net Position

The difference between the total number of long and short positions that a trader or institution holds in a particular security, currency, or commodity.

Open Interest

The total number of outstanding derivative contracts, such as futures or options, that have not been settled.

Spread Position

In trading, holding a combination of options positions that offset each other, to capitalize on movements in market prices or volatility.

Maturity

The date on which a financial obligation must be repaid or the final due date on which a bond or other debt instrument comes due and the principal must be paid back.