Which of the Following Is a Systematic Risk

question 29

Multiple Choice

Which of the following is a systematic risk?

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

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Definitions:

Situation Analysis

The assessment of internal and external factors influencing a company's performance and strategy planning.

Diversification

A risk management strategy that involves adding variety to a product portfolio or investments to spread out potential risk.

Positioning

The strategy of defining a brand or product's unique value in the market and in the minds of consumers.

Franchising

A business model wherein a business owner (franchisor) grants to an individual or entity (franchisee) the rights to operate a business under the franchisor's brand and system in exchange for a franchise fee and ongoing royalties.