Which One of the Following Is an Example of Systematic

question 148

Multiple Choice

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

• A) The price of lumber declines sharply.
• B) Airline pilots go on strike.
• C) The Bank of Canada increases interest rates.
• D) A blizzard hits St. John's.
• E) People become diet conscious and avoid fast food restaurants.

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Definitions:

Cash Flow Estimation

The process of forecasting the cash inflows and outflows over a specific period, vital for budgeting and financial planning.

Cash Flows

The complete volume of financial transactions in and out of a business, crucially influencing its cash on hand.

Subjective Judgment

The use of personal opinions and feelings rather than external evidence or objective criteria to make decisions or evaluations.

Discounted Cash Flow

An appraisal technique that calculates an investment's worth by discounting its expected future cash flows to account for the time value of money.