A business has strong sales and profits, but its stock price falls anyway because stock prices in general are declining. This is an example of
A) business risk.
B) financial risk.
C) market risk.
D) liquidity risk.

Question

Quizplus · Accepted Answer

Market risk, also known as systematic risk, refers to the risk that affects the entire market or a segment of the market, leading to fluctuations in the prices of all securities within that market. In this scenario, the decline in the stock price is due to overall market movements rather than the company's specific financial performance or decisions, which is characteristic of market risk.

A Business Has Strong Sales and Profits, but Its Stock