The Challenge of 3BL Is That It Is Difficult to Say

question 104

True/False

The challenge of 3BL is that it is difficult to say just how good is the reporting of an organization's efforts,such as Wayne and MacDonald presenting the scenario of donating 1.2 percent of its profits,without knowing how large the firm is and what the averages are in its industrial sector.

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Definitions:

Unsystematic Risk

The risk that is unique to a specific company or industry.

Systematic Risk

The danger that affects the whole market or a specific market segment, referred to as market risk, is unremovable by diversifying investments.

Business-Specific Risk

Refers to the uncertainties faced by a company due to the industry it operates in or the nature of its business operations.

Security Market Line

A representation in financial markets that shows the relationship between risk (as measured by beta) and the expected return of a portfolio or individual security.