Although Unique Risk Is Present in Differing Amounts, Individual Stocks

question 86

Multiple Choice

Although unique risk is present in differing amounts, individual stocks are:

• A) exposed to the same amount of market risk.
• B) exposed to differing amounts of market risk also.
• C) not exposed to market risk; only the general economy is subject to market risk.
• D)able to diversify away their market risk.

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Definitions:

Sells Assets

Involves the process of disposing of or selling off physical or intangible assets by a company or individual.

Vertical Integration

The expansion of a business by acquiring or establishing control over different stages of its production or distribution processes.

Acquires Suppliers

The process where a company takes ownership of its suppliers to control the supply chain or reduce production costs.

Acquires Distributors

The process by which a company purchases or assumes control over distribution firms to streamline its supply chain and improve market access.