Which One of the Following Is an Example of a Nondiversifiable

question 19

Multiple Choice

Which one of the following is an example of a nondiversifiable risk?

• A)a well respected chief executive of a firm suddenly resigns
• B)a well respected chairman of the European Central Bank suddenly resigns
• C)a key employee suddenly resigns and accepts employment with a key competitor
• D)a well managed firm reduces its work force and automates several jobs
• E)a poorly managed firm suddenly goes out of business due to lack of sales

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Definitions:

Preferred Supplier-Customer Relationships

Business arrangements where mutual benefits are derived from long-term associations between suppliers and their key customers, often characterized by trust and cooperation.

Quality Supplies

Materials or goods of high standard or grade used in the production of products or in the provision of services.

Virtual Organization

A structure enabled by digital technologies that allows individuals or entities across different locations to collaborate and function as a single entity.

Strategic Alliances

Strategic alliances are agreements between two or more parties to pursue a set of agreed-upon objectives while remaining independent organizations.