When the Home Construction Industry Does Poorly Due to a Recession

question 65

Multiple Choice

When the home construction industry does poorly due to a recession, this is an example of:

• A)Systematic risk
• B)Idiosyncratic risk
• C)Risk premium
• D)Unique risk

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Definitions:

Disaster Relief Funds

Financial assistance provided to individuals, businesses, and communities affected by natural or human-made disasters.

Flood-Prone Areas

Regions that are highly susceptible to flooding due to their geographical features, environmental conditions, or proximity to bodies of water.

Depositor Moral Hazard

A situation in financial systems where depositors engage in riskier behaviors because they know their deposits are protected, for instance, by government insurance.

Savings and Loan Industry

A sector of the financial services industry that specializes in accepting savings deposits and making mortgage and other loans.