Q769
Risk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as
A.
stock risk
B.
portfolio risk
C.
diversifiable risk
AnswerD.
market risk
Answer: Option C
Solution
Answer: Option C
Solution:
Risk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as diversifiable risk. Diversifiable risk is the possibility that there will be a change in the price of a security because of the specific characteristics of that security. Diversification of an investor's portfolio can be used to offset and therefore eliminate this type of risk.