Unsystematic Risk Is Defined as the Risk That

question 146

Multiple Choice

Unsystematic risk is defined as the risk that:

• A) Affects almost every financial asset that is sold in the marketplace.
• B) Relates to the overall economy, such as inflation and GDP growth.
• C) Serves as the basis for determining the amount of the risk premium.
• D) Is derived from an event that affects a single firm or a limited number of assets.
• E) Is generated by expected news.

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Definitions:

Beddings

Layers of sedimentary rock that indicate the accumulation of sediment over time, each with distinctive properties.

Strait of Gibraltar

A narrow passage of water connecting the Atlantic Ocean to the Mediterranean Sea, bordered by Spain in the north and Morocco in the south.

Atlantic Ocean

The Atlantic Ocean is the second-largest ocean in the world, separating the continents of North America and Europe to the west from Africa and Europe to the east.

Sediment

Particles of rock, soil, or biological origin that are transported and deposited by wind, water, or ice.