Which One of the Following Is an Example of Diversifiable

question 123

Multiple Choice

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

• A) A decrease in the average cost of living.
• B) An increase in the prime interest rate.
• C) An increase in the minimum hourly wage.
• D) A new government regulation on aircraft engines.
• E) A decrease in federal income taxes on business incomes.

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Definitions:

Mexican Pesos

The currency of Mexico, used in financial transactions within the country.

Invested

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Absolute Purchasing Power Parity

A theory that states the price of goods in one country should equal the price of the same goods in another country when exchange rates are considered.