Which One of the Following Is an Example of a Nondiversifiable

question 75

Multiple Choice

Which one of the following is an example of a nondiversifiable risk?

• A)a well respected chief executive of a firm suddenly resigns
• B)a well respected chairman of the European Central Bank suddenly resigns
• C)a key employee suddenly resigns and accepts employment with a key competitor
• D)a well managed firm reduces its work force and automates several jobs
• E)a poorly managed firm suddenly goes out of business due to lack of sales

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Definitions:

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often larger or more enduring reward.

Competitive Careers

Careers in which individuals vie against others for advancement, recognition, or rewards in their professional fields.

Biological Needs

Essential requirements for human survival, such as food, water, shelter, and sleep.

Basic Biological Motives

Fundamental drives that are necessary for survival, such as hunger, thirst, and the need for shelter.