Question

Which of the following can be classified as an unsystematic risk? A. An unexpected decrease in...

Which of the following can be classified as an unsystematic risk?

A. An unexpected decrease in interest rates

B. A large oil spill as a result of a rapture in an oil tanker

C. A company's short-term interest rate on borrowing is increased by its bank

E. A only

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Answer #1

Unsystematic risk are those risk that a particular company may have in regards to it's business or Operation or risk specific to company.

Risk related to company is called unsystematic risk.

An unexpected decrease in interest rates is Systematic risk, as it is not related to specific company.

A large oil spill as a result of a rapture in an oil tanker is also not company specific risk. So it is unsystematic risk.

A company's short-term interest rate on borrowing is increased by its bank. This is specific risk to company. So it is unsystematic risk.

Answer is C

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