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

The employees of Textile, Inc. going on strike is an example of diversifiable risk because it is specific to that particular company and does not affect the entire market or industry. The other options are either market-wide or economy-wide factors that cannot be diversified away.

Which One of the Following Is an Example of Diversiﬁable