Shawn Determines That If Lexall Corporation Has High Revenues,then Waters

question 63

Multiple Choice

Shawn determines that if Lexall Corporation has high revenues,then Waters Corporation will have low revenues,and that if Lexall Corporation has low revenues,then Waters Corporation will have high revenues.Shawn buys stock in both corporations.

• A)He has reduced firm-specific risk but not market risk.
• B)He has reduced market risk,but not firm-specific risk.
• C)He had reduce both firm-specific risk and market risk.
• D)He has reduced neither firm-specific risk nor market risk.

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Definitions:

Wages Payable

Liabilities arising from employees' salaries that are earned but not yet paid by the company, representing an obligation to pay for labor services received.

Depreciable Asset

An asset that loses value over time due to wear and tear or obsolescence and for which depreciation can be applied in accounting.

Chlorinated Hydrocarbons

Chemical compounds containing chlorine, carbon, and hydrogen, which are used in industrial applications but can be harmful to the environment and health.

Pesticides

Chemical substances used to kill or control pests including insects, weeds, and disease-causing organisms, in agricultural and residential settings.