Consider a Day on Which the S&P/TSX 60 Index, an Index

question 327

Essay

Consider a day on which the S&P/TSX 60 Index, an index of 60 large stocks, rose 59 points. On
that same day, Alcan, which is one of the stocks in the Index, announced some unexpectedly bad
news. The price of Alcan declined $10 on that same day. Using this example, discuss systematic
risk, portfolio diversification, and asset specific risk.

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Definitions:

Desired Behaviour

The specific actions or reactions expected from employees that are aligned with organizational goals and values.

Instrumentality

The perceived relationship between performance and the attainment of certain outcomes, key to understanding motivation in expectancy theory.

Expectancy

In the context of motivation, expectancy refers to an individual's belief that a particular effort will lead to a desired performance level.

Valence

In motivation theory, the value an individual places on the expected outcome of a particular course of action.