A company's stock price jumped when it announced that its revenue had decreased because of the quality issues of its products. This is an example of Omarket risk Ounsystematic risk O undiversifiable risk systematic risk

A company's stock price jumped when it announced that its revenue had decreased because of the quality issues of its products. This is an example of Omarket risk Ounsystematic risk O undiversifiable risk systematic risk

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 11Q

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Concept explainers

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.

Question

A company's stock price jumped when it announced that its revenue had decreased
because of the quality issues of its products. This is an example of
market risk
Ounsystematic risk
O undiversifiable risk
O systematic risk

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