An example of diversifiable risk that a financial manager should ignore when analyzing a project's risk would include:Group of answer choicescommodity price changes.risks of government non-approval of the project.labor costsoverall stock price fluctuations.
Question
An example of diversifiable risk that a financial manager should ignore when analyzing a project's risk would include:Group of answer choicescommodity price changes.risks of government non-approval of the project.labor costsoverall stock price fluctuations.
Solution
An example of diversifiable risk that a financial manager should ignore when analyzing a project's risk would include overall stock price fluctuations.
Here's why:
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Diversifiable risk, also known as unsystematic risk, is a type of risk that is specific to a particular company or industry. It can be reduced or eliminated through diversification – by investing in a variety of assets or projects.
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Commodity price changes, risks of government non-approval of the
Similar Questions
Which of the following risk(s) is (are) diversifiable?Select one or more alternatives:The risk that short-term interest rates increase unexpectedly.The risk that an oil tanker ruptures, creating a large oil spill.The risk of global pandemic.The risk that is going to rain tomorrow.
Risk Management: Identifying potential risks and developing strategies to mitigate them. This helps in minimizing the impact of uncertainties on the project
Manage project risks
Investors can eliminate what type of risk by diversifying?a.Total riskb.Unsystematic riskc.Beta riskd.Systematic risk
Risk” usually _______ as the project progresses.
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