Unique Risk - Non-Systematic Risk Quiz
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Questions and Answers

What type of risk affects individual companies due to specific events or circumstances?

  • Market risk
  • Default risk
  • Unique risk (correct)
  • Interest rate risk
  • How can diversification help mitigate unique risk?

  • By spreading investments across different assets (correct)
  • By focusing solely on fixed-income securities
  • By hedging against currency fluctuations
  • By avoiding corporate bonds
  • What is the impact of high inflation on companies?

  • Lower consumer spending
  • Decreased profit margins (correct)
  • Increased investor returns
  • Higher stock prices
  • Which factor can slow down economic growth when it rises?

    <p>Interest rates</p> Signup and view all the answers

    What does interest rate risk refer to?

    <p>Changes in interest rates</p> Signup and view all the answers

    What should be considered when comparing mutual funds?

    <p>The historical performance data</p> Signup and view all the answers

    What type of risk affects individual companies or assets and can't be easily diversified away?

    <p>Non-systematic risk</p> Signup and view all the answers

    If an automobile manufacturer's workers go on strike, what type of risk is this considered?

    <p>Non-systematic risk</p> Signup and view all the answers

    Which scenario is an example of non-systematic risk?

    <p>Litigation against a specific company</p> Signup and view all the answers

    What could cause the stock price of a technology company to increase according to the text?

    <p>Good advertising campaigns</p> Signup and view all the answers

    Which type of risk affects the entire market or a broad segment of it according to the text?

    <p>Systematic risk</p> Signup and view all the answers

    What could cause a retail company's stock price to drop based on the text?

    <p>Sales slump due to failed advertising</p> Signup and view all the answers

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