A Portfolio of Stocks Fluctuates When the Treasury Yields Change

question 42

Multiple Choice

A portfolio of stocks fluctuates when the Treasury yields change. Since this risk cannot be eliminated through diversification, it is called ________.

• A) firm-specific risk
• B) systematic risk
• C) unique risk
• D) none of the options

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Definitions:

Quarterly Cash Flows

The movement of cash into and out of a business over a three-month period, often used to indicate the company's liquidity, efficiency, and financial health.

Technology Companies

Firms that produce or provide technology products and services, including software development, electronics manufacturing, and information technology services.

Reported Performance

The presentation of a company's operational and financial achievements over a specific period, typically as stated in its financial statements.

P/E Ratio

The price-to-earnings ratio, a measure of a company's current share price relative to its per-share earnings.