12 Questions
What type of risk affects the entire market or a broad segment of it?
Market risk
How does high inflation impact companies?
Decreases stock prices
Which factor can slow down economic growth due to higher borrowing costs?
High-interest rates
What is the primary reason why diversification can help mitigate unique risk?
Spreads investments across different assets
Which type of risk is related to factors beyond individual companies' control?
Market risk
How does high-interest rates impact consumer spending?
Lowers consumer spending
Which type of risk affects individual companies or assets and cannot be easily diversified away?
Unique risk
How could lawsuits against a pharmaceutical company affect its stock price?
Cause the stock price to drop due to legal costs
What effect can a strike by workers at an automobile manufacturer have on the company's profitability?
Decrease profitability by disrupting production
How could winning a major government contract impact a technology company's stock price?
Boost revenue and stock price
What is one way in which a successful advertising campaign by a retail company can affect its stock price?
Drive up sales and increase investor confidence
Why is Unique risk also referred to as Non-Systematic Risk?
Because it affects individual companies and assets
Test your knowledge on unique risk, also known as non-systematic risk, which affects individual companies or assets and cannot be easily diversified away. Understand the impact of events such as lawsuits and strikes on stock prices and investments.
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