Which Type of Risk Can Be Eliminated Through Diversification

question 11

Multiple Choice

Which type of risk can be eliminated through diversification?

• A) total risk
• B) market risk
• C) firm specific risk
• D) none of the above

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Definitions:

Pollution Abatement

Actions or measures taken to reduce, control, or eliminate pollution and its negative effects on the environment.

Consumer Tastes

Preferences or desires of consumers regarding certain products or services, which can influence buying behavior and market trends.

Externalities

The cost or benefit that affects a party who did not choose to incur that cost or benefit, affecting third parties outside the transaction.

Market for Product X

The demand and supply conditions, participants, and interactions specific to a particular product, designated as "Product X."