Use the Information for the Question(s)below

question 51

Multiple Choice

Use the information for the question(s) below.
Consider an economy with two types of firms, S and U. The S firms always move together, but U firms move independently of each other. For both types of firms there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-'Independent risk' is more closely related to:

• A)diversification risk.
• B)common risk.
• C)systematic risk.
• D)unsystematic risk.

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Definitions:

Nominal Data

Data that are categorized without a natural order or ranking among the categories, used for labeling variables without quantitative values.

Pie Chart

A circular statistical graphic divided into slices to illustrate numerical proportion.

Charitable Donation

A gift made by an individual or organization to a nonprofit organization, charity, or private foundation.

Legal Gambling

Forms of wagering and betting that are permitted by law, including various games and activities regulated by governmental and licensing authorities.