Bad Managerial Judgments or Unforeseen Negative Events That Happen to a Firm

question 32

True/False

Bad managerial judgments or unforeseen negative events that happen to a firm are defined as "company-specific," or "unsystematic," events, and their effects on investment risk can in theory be diversified away.

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Definitions:

Defoliants

Chemicals used to remove the leaves from trees and plants, often used in agriculture to control weeds, and militarily to increase visibility in combat zones, such as in the Vietnam War.

1,000,000 Pounds

A monetary value in British currency, often used to denote a significant sum of money.

Local Villagers

Residents of a small rural community or village, typically characterized by a close-knit social structure and a reliance on local resources for livelihood.

Henry Kissinger

A German-born American diplomat and political scientist who served as Secretary of State and National Security Advisor under the presidential administrations of Richard Nixon and Gerald Ford.