The equity risk derived from the ﬁrm's operating activities is called ____________ risk.
A) market
B) systematic
C) extrinsic
D) business
E) ﬁnancial

Question

Quizplus · Accepted Answer

The equity risk derived from the firm's operating activities is called business risk. Market risk pertains to the risk of the overall stock market, systematic risk refers to risk that cannot be diversified away, extrinsic risk is not a commonly used term in finance, and financial risk refers to the risk of the firm's financing decisions.

The Equity Risk Derived from the ﬁRm's Operating Activities Is