Which One of the Following Is an Example of a Nondiversifiable

question 211

Multiple Choice

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

• A) A well-respected president of a firm suddenly resigns.
• B) A well-respected governor of the Bank of Canada suddenly resigns.
• C) A key employee of a firm 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:

Employment Discrimination

Employment Discrimination involves unequal treatment of employees or job applicants based on race, gender, age, disability, religion, or national origin.

Federal Statutes

Laws enacted by the national legislature of a country; in the United States, laws passed by Congress and signed by the President.

Workers' Compensation Laws

Legislation that provides financial and medical benefits to employees injured in the course of employment.

Claims

Formal assertions or demands for something due or believed to be owed, often seen in legal contexts like insurance or lawsuits.