Systematic risk is diversifiable, so it is an investment's relevant risk. Unsystematic risk is nondiversifiable risk and therefore not relevant.?
Answer the following statement true (T) or false (F)
False
Market risk is systematic risk, and is nondiversifiable, whereas firm-specific risk is unsystematic risk, and is diversifiable. See 8-6: Different Types of Risk
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The stockholders' equity section of the balance sheet for Scuba Gear Corporation appeared as follows before its recent stock dividend: Common stock, $5 par, 100,000 shares issued and outstanding $ 500,000 Additional paid-in capital 100,000 Retained earnings 725,000 Total stockholders' equity $1,325,000 Scuba Gear declared a 10% stock dividend when the market price per share was $8 . After the
stock dividend was distributed, the components of the stockholders' equity section were: Common Stock Add'l. Paid-in Capital Retained Earnings a. $580,000 $100,000 $645,000 b. $550,000 $100,000 $675,000 c. $550,000 $130,000 $645,000 d. There would be no change in the components of stockholders' equity.
In response to calls for greater pay flexibility:
A. Unions have refused to budge from a seniority based pay system. B. Management has worked to stifle creativity in pay design. C. Unions have agreed to more flexible pay systems like merit, bonuses, and skill-based pay. D. The government has passed laws aimed at protecting and employers right to design pay plans without union interference.
Martin's Spa and Salon's assets total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct?
A. David's owners' equity is $87,000. B. The owners' equity in David's is $61,000. C. David's liabilities are $148,000. D. The firm's liabilities are $61,000. E. The firm has more owners' equity than liabilities.
It is important to employees to know what is not changing.
a. true b. false