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marishachu [46]
4 years ago
10

If the Federal Reserve were to change from an expansionary to a contractionary monetary

Business
1 answer:
zzz [600]4 years ago
6 0

Answer:

B) systematic risk

Explanation:

Federal Reserve changes in monetary policies affect the entire securities market hence considered a Systematic risk. It is also known as the Non-diversifiable risk ; it cannot be diversified away unlike stock specific or industry specific risk(unsystematic ) which can be eliminated through diversification.

Systematic risk is unavoidable and may be difficult to predict. Other examples include increase in long term interest rates, recessions or wars. Additionally, Investors are only compensated for systematic risk and not for diversifiable risk.

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Arrange the types of investments in the correct order from the least risky to the most risky investment.
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Bonds will be the least risky since there is no risk involved at all. Bonds give out guaranteed payments and A rated bonds will be even more secure.

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The most risky would be speculative stocks.

The order from least risky to most risky would be:

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3 years ago
Which one of the following statements is true? a. A manufacturing company will normally have raw materials, work in process, and
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d. A manufacturing company will normally have raw materials, work in process, and merchandise inventory as inventory account classifications.

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Descriptive followed by causal is the correct answer.

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