Question

Which one of the following is an example of specific risk? I. Fire destroys an entire...

Which one of the following is an example of specific risk?

I. Fire destroys an entire block in a town.

II. Federal government imposes a $100 fee on all business entities.

III. Employment taxes increase nationally.

IV. Toymakers are required to improve their safety standards.

I and III only.

I and IV only.

I, III, and IV only

II and IV only.

II and III only
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Answer #1

Answer is. I and IV only

Because specific risk ,here name indicate that are very specific to a company which is occurs unexpected. And also specific risk related to small group of companies. In short , specific risk related to specific group or specific things.

Here I and IV is the specific risk , fire destroyed an Entire Block in town (Block is a specific), Toys maker are the small group of the company so it also specific.

II, federal government impose 100 fee on all business entity , here no specific risk there. It is on all business entity so not considered

III, Employment taxes increase nationally, so here also no specific things not mention, it is related to whole nation.

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