The risk of losses on financial investments caused by an adverse price movements
Correct answer: A. Systematic Risk
- A. Systematic Risk
- B. Idiosyncratic Risk
- C. Financial Risk
- D. Business Risk
Explanation
Systematic risk, also called market risk, arises from broad price movements affecting many financial investments and cannot be eliminated through diversification. Idiosyncratic risk is specific to an individual company or security.
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About Business Finance
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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