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mihalych1998 [28]
3 years ago
9

Which one of the following is an example of a nondiversifiable risk?

Business
1 answer:
AlekseyPX3 years ago
8 0

Answer:

B. a well respected chairman of the Federal Reserve suddenly resigns

Explanation:

A non diversificable risk is a risk that cannot be eliminated by diversifying a portfolio. It is dependent on the market conditions. E.g. recession, war.

A diversificable risk is a risk that can be eliminated by diversifying a portfolio. Examples include: a key employee suddenly resigns and accepts employment with a key competitor, a well managed firm reduces its work force and automates several jobs.

I hope my answer helps you.

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The total cost is a function of the fixed and variable cost. Whilst the fixed cost does not change at a certain range of activities level, the variable cost changes as the level of activities(units produced or sold).

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