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Fact Pattern 26-1B (Questions B8-B10 apply)
Destiny obtains a check payable to her order from Eugenia. Destiny signs the back and adds the notation "without recourse."
-Refer to Fact Pattern 26-1B. Destiny's signature and the notation "without recourse" constitute
Nonsystematic Risk
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.
Diversifiable Risk
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or nonsystematic risk. Nondiversifiable risk refers to systematic or market risk.
Market Risk
Also known as systemic risk, it's the potential for investors to experience losses due to factors that affect the overall performance of the financial markets.
Unique Risk
Referred to as unsystematic risk, it denotes the risk linked to a particular company or sector.
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