Which of the following is not an example of unsystematic risk?
A)Changes in the level of interest rates.
B)The chief executive officer resigns.
C)A legal suit against a company for environmental pollution.
D)The development of a new product line.

Question

Quizplus · Accepted Answer

Changes in the level of interest rates are an example of systematic risk because they affect the overall market and cannot be diversified away by holding a diversified portfolio. The other choices are examples of unsystematic risk because they are specific to the individual company and can be diversified away by holding a well-diversified portfolio.

Which of the Following Is Not an Example of Unsystematic