A Company's Stock Price Jumped When It Announced That Its

question 64

Multiple Choice

A company's stock price jumped when it announced that its revenue had decreased because of the quality issues of its products. This is an example of ________.

• A)market risk
• B)unsystematic risk
• C)systematic risk
• D)undiversifiable risk

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Definitions:

Original Cost

The initial purchase price or investment made in acquiring an asset, including any related acquisition costs.

Leasehold

An interest in land or property which is held on a lease.

Lessor

A person or entity that rents out property or equipment to another party, known as the lessee, under the terms of a lease agreement.

Lessee

A person or entity that leases or rents property or equipment from another, known as the lessor.