Recently an Oil Rig in the Gulf of Texas Blew

question 299

Multiple Choice

Recently an oil rig in the Gulf of Texas blew up causing the value of your stock in the company who owns the oil rig to fall.What type of risk does this represent?

• A)Diversifiable risk
• B)Systematic risk
• C)Political and regulatory risk
• D)Both B and C

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Definitions:

Installment Sales

A sales method that allows customers to pay for goods or services over a period of time in installments.

Critical Event

A significant occurrence that has a profound impact on an entity's operations or financial performance, necessitating special consideration in accounting and financial reporting.

Measurability Conditions

Criteria that determine when revenue can be recognized in the accounting process, ensuring it can be reliably measured.

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term projects proportionally with the degree of completion.