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War, inflation, and the condition of the foreign markets are all examples of: a. unsystematic...

Question:

War, inflation, and the condition of the foreign markets are all examples of:

a. unsystematic risk

b. business specific risk

c. nondiversifiable risk

d. internal risk

Investment Risks:

Investment Risks is defined in Finance as the factors or events the result of which will significantly affect the rate of return of a certain investment. In order, to avoid or at the very least, to minimize it, some investors tend to diversify their portfolios.

Answer and Explanation:

Answer: c. nondiversifiable risk Problems like the ones mentioned in the problem (e.g War) are types of risks wherein an investor will be unable to reduce the loss that could result thereafter by simply investing to another company, since such issues are nationwide, or even worse, worldwide.


Learn more about this topic:

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Investment Risks: Definition & Types

from Finance 305: Risk Management

Chapter 3 / Lesson 3
4.8K

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