Contingencies That Are Probable but Cannot Be Estimated Are Recorded

question 77

True/False

Contingencies that are probable but cannot be estimated are recorded as liabilities and disclosed in the notes to the financial statements.

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Definitions:

Unique Risk

A risk that affects a very small number of assets, also known as unsystematic risk, specific risk, or idiosyncratic risk, and can be largely eliminated by diversification.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets, including economic, political, and geopolitical events.

Diversifiable Risk

The component of an investment's risk that can be reduced or eliminated through diversification, which involves spreading investments across various assets to reduce exposure to any single risk.

Unique Risk

Unique Risk, also known as unsystematic risk, refers to the risk associated with a specific company or industry that can be reduced through diversification.