Which of the Following Is NOT a Diversifiable Risk

question 25

Multiple Choice

Which of the following is NOT a diversifiable risk?

• A)The risk that oil prices rise,increasing production costs
• B)The risk of a product liability lawsuit
• C)The risk that the CEO is killed in a plane crash
• D)The risk of a key employee being hired away by a competitor

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Definitions:

Interest Rates

The price paid by a borrower to a lender for accessing assets, depicted as a proportion of the initial amount.

Purchasing Power Parity

Purchasing power parity (PPP) is an economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust so that identical goods cost the same in different countries.

Interest Rate Parity

A theory which suggests that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Approximation Formula

A mathematical equation or expression used to estimate a value or to simplify calculations.