An Individual Who Possesses a Specialized Skill That Is Difficult

question 29

Multiple Choice

An individual who possesses a specialized skill that is difficult to execute will

• A) necessarily receive wages considerably higher than those who lack this skill.
• B) receive a wage determined by the number of other persons possessing this skill.
• C) receive a high wage only when this skill is in great demand relative to its supply.
• D) receive a wage rate that is lower than similarly productive individuals who lack this skill.

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Definitions:

Unsystematic Risk

The risk of price change in a specific security due to factors unique to that security, not affecting the market as a whole.

Unique Risks

The specific uncertainties or dangers associated with a particular investment or company, which are not common to all investments.

Asset-Specific Risks

Asset-Specific Risks are those risks that are unique to an individual asset or investment, such as company performance or sector volatility, as opposed to systemic risks affecting the entire market.

Standard Deviation

A statistical measure of the dispersion or spread in a set of data, indicating how much variation there is from the average (mean).