Which One of the Following Is the Best Example of Systematic

question 44

Multiple Choice

Which one of the following is the best example of systematic risk?

• A)The price of lumber declines sharply
• B)The airline pilots of a firm go on strike
• C)The Federal Reserve increases interest rates
• D)A hurricane hits a tourist destination
• E)People become diet conscious and avoid fast food restaurants

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Definitions:

Amortized

Refers to the process of paying off debt over time in regular installments of interest and principal sufficient to repay the loan in full by its maturity date.

Principal

The original amount of money loaned or invested, separate from the interest or earnings it accrues over time.

Future Value

The amount of money an investment is expected to grow to over a period of time, considering interest or returns.

Unequal Payments

Payments that vary in amount over a period, commonly seen in loan repayments or investment returns that do not have a fixed payment schedule.