Which of the Following Provides the Best Example of a Systematic

question 30

Multiple Choice

Which of the following provides the best example of a systematic risk event?

• A)A strike by union workers hurts a firm's quarterly earnings.
• B)Cattle disease in Queensland hurts local farmers and buyers of beef.
• C)The Reserve Bank increases interest rates 50 basis points.
• D)A senior executive at a firm embezzles $10 million and escapes to South America.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Function Based Divisions

Organizational structuring where a company is divided into departments based on functions such as marketing, finance, or production.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services to make a profit.

M-Form Organization

A multi-divisional organizational structure, characterized by a set of autonomous divisions organized under a centralized corporate headquarters.