Which One of the Following Is the Best Example of a Diversifiable

question 60

Multiple Choice

Which one of the following is the best example of a diversifiable risk?

• A)interest rates increase
• B)energy costs increase
• C)core inflation increases
• D)a firm's sales decrease
• E)taxes decrease

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Definitions:

Purchasing

involves the process of acquiring goods or services in exchange for monetary compensation.

Apartment Building

A residential building containing multiple apartments or units meant for separate tenants.

Warranty

A promise, statement, or other representation that an item has certain qualities; also, an insured’s promise to abide by restrictions, especially those written into an insurance policy. Also, an obligation imposed by law that an item will have certain qualities. Warranties made by means of a statement or other affirmation of fact are called express warranties; those imposed by law are implied warranties.

Insured

A party that is protected by an insurer against losses caused by the risks specified in an insurance policy.