The _____ of a Firm's Structure Is the Starting Point

question 7

Multiple Choice

The _____ of a firm's structure is the starting point in understanding the organizational issues such as reporting relationships, authority, and responsibility.

• A)vertical dimension
• B)vertical integration
• C)concentration
• D)span of control
• E)diversification

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Definitions:

Diversified Away

The risk that can be reduced or eliminated in a portfolio through investments in a variety of assets, thus not tied to the performance of a single investment.

Market Risk

The risk of losses in positions arising from movements in market prices.

Firm-specific Risk

The portion of an asset's risk that is attributable to the company's individual factors, uncorrelated with general market movements.

Nonsystematic Risk

The part of an investment's risk that is specific to the investment, unrelated to the market's overall movements.