Question

You invested in Facebook, and you're a diversified investors. Which of the following risks concern you...

You invested in Facebook, and you're a diversified investors. Which of the following risks concern you the most?

a.

The risk that a global economic slowdown will affect how much companies spend on advertising

b.

The risk that users will find a different social media platform to spend their time on.

c.

The risk that Mark Zuckerberg will stay on as CEO

d.

The risk that Mark Zuckerberg will leave as CEO

e.

The risk that new privacy laws will restrict data gathering and access

Homework Answers

Answer #1

The correct answer is "A"

As you have a diversified portfolio, so you will not be worried about the Unsystrematic risk, which is a company-specific risk. The only risk that you should be worried about is the Systematic Risk. Global Economic Slowdown is a systematic risk. If due to this companies spend less on advertising, then Facebook will be affected by a great deal. This risk should concern you.


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