Which Is the Best Example of Idiosyncratic Risk

question 124

Multiple Choice

Which is the best example of idiosyncratic risk?

• A) a financial crisis
• B) a lawsuit because the corporation produced a faulty product
• C) a recession
• D) rising interest rates

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Definitions:

Statute of Frauds

A legal doctrine requiring certain contracts to be documented in writing and officially signed, aimed at preventing fraudulent claims and enforcing agreements.

Oral Contract

An agreement between parties that is spoken and not written, yet is legally binding under certain conditions.

Indefinite Period

A time span without a specified end date.

Merger Clause

A contract clause providing that the written contract is the complete expression of the parties’ agreement. Also called integration clause.