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:

Outstanding Debt

The total amount of borrowed money a company or individual has yet to repay to creditors.

Continuing Operations

Parts of a business expected to continue operating and contributing to revenue over the long term, as opposed to discontinued operations.

Carrying Amount

The net value of an asset or liability on a company's balance sheet, determined by subtracting its accumulated depreciation or amortization from its original cost.

Convertible

A security, often bonds or preferred shares, that can be converted into a specified number of another form, commonly shares of the issuing company's common stock.