Which one of the following is an example of diversifiable risk?
A) The price of electricity just increased.
B) The employees of Textile, Inc. just voted to go on strike.
C) The government just imposed new safety standards for all employees.
D) The government just lowered corporate income tax rates.
E) The Workers Compensation Premiums just increased nationwide.

Question

Quizplus · Accepted Answer

Diversifiable risk, also known as unsystematic risk, is specific to a company or industry. The scenario where employees of Textile, Inc. voted to go on strike is an example of diversifiable risk because it affects only the specific company and not the entire market or economy.

Which One of the Following Is an Example of Diversifiable