An unsystematic risk which can be eliminated but market risk is the__________?
Correct answer: B. Remaining risk
- A. Aggregate risk
- B. Remaining risk
- C. Effective risk
- D. Ineffective risk
Explanation
Unsystematic risk can be diversified away, while systematic market risk remains after diversification. The risk left over is therefore called remaining risk.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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