The risk of losses on financial investments caused by an adverse price movements
Correct answer: D. Systematic Risk
- A. Business Risk
- B. Idiosyncratic Risk
- C. Financial Risk
- D. Systematic 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.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
The process of investing in projects that are most likely to be profitable within limited capital availability is called __________?
A financial analysis technique used to evaluate a company's performance over time
The exchange markets and over the counter markets are considered as two types of __________?
Market Risk is also called as __________?
The risk of losses caused by flawed or failed processes, policies, systems or events that disrupt business operations is called
Investment in a group of securities is known as?