Many Former Employees at Enron,an Energy Trading and Supply Company,had

question 13

Multiple Choice

Many former employees at Enron,an energy trading and supply company,had a large part of their portfolio invested in Enron stock.These employees were bearing a high degree of ________ risk.

• A)unsystematic
• B)systematic
• C)market specific
• D)non-diversifiable

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Definitions:

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices during a specified period.

Binding Price Floor

A government or regulatory-imposed price control that sets the minimum price that can be charged for a good or service, above the equilibrium price, leading to potential surpluses.

Surplus

Surplus refers to the amount by which production, resources, or inventory exceeds what is needed or used, often resulting in excess supply.

Nonbinding Price Floor

A minimum price set by the government that is below the equilibrium price, having no effect on the market.