Which One of the Following Is an Example of Diversifiable

question 152

Multiple Choice

Which one of the following is an example of diversifiable risk?

• A) The price of electricity just increased.
• B) The employees of Textile, Inc. just voted to go on strike.
• C) The government just imposed new safety standards for all employees.
• D) The government just lowered corporate income tax rates.
• E) The Workers Compensation Premiums just increased nationwide.

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Definitions:

Audit Committee

A key committee of a company's board of directors responsible for oversight of financial reporting, audit processes, and compliance matters.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and government agencies.

External Auditors

Independent third parties that review an organization's financial statements to ensure accuracy and compliance with accounting standards.

Financial Accounting Standards Board

A stand-alone body in charge of setting and refining standards for financial accounting and reporting in the USA.