Classify each of the following events as a source of systematic or unsystematic
ID: 2758742 • Letter: C
Question
Classify each of the following events as a source of systematic or unsystematic rick and why.
A. Ben Bernanke retires as Chairman of the Federal Reserve and Arnold Schwarzenegger is appointed to take his place.
B. Martha Stewart is convicted of insider trading and is sentenced to prison.
C. An OPEC embargo raises the world market price of oil.
D. A major consumer products firm loses a product liability case.
E. The Supreme Court rules that no employer can layoff an employee without first giving 30 days notice.
Explanation / Answer
A. Ben Bernanke retires as Chairman of the Federal Reserve and Arnold Schwarzenegger is appointed to take his place.- unsystematic risk
B. Martha Stewart is convicted of insider trading and is sentenced to prison. - unsystematic risk
C. An OPEC embargo raises the world market price of oil.- systematic risk
D. A major consumer products firm loses a product liability case.- unsystematic risk
E. The Supreme Court rules that no employer can layoff an employee without first giving 30 days notice.- systematic risk