Question

Which of the following is an idiosyncratic risk for Amazon.com? – A) The Federal Reserve increases interest rates. – B) The US exits the World Trade Organization, leading to a global trade war. – C) The FAA approves testing of drone-delivered packages. – D) Health care costs continue to rise, slowly dragging the US economy into a recession.

Answer 1

The idiosyncratic risk for Amazon.com among the options is the FAA approval for testing drone-delivered packages (C), as it directly affects Amazon's specific business activities.

Step-by-step explanation:

The question is asking to identify which of the given options represents an idiosyncratic risk for Amazon.com. Idiosyncratic risk refers to risk factors that are particular to a specific company, rather than general market or economic risks that would affect all companies. Public policies like a stock market collapse (b), rapid export growth (c), rising inflation (d), higher natural unemployment rates (e), and fluctuations in oil prices (f) are not idiosyncratic risks. In the choices given, the FAA approving testing of drone-delivered packages (C) is unique to Amazon's business operations and strategy and would be considered an idiosyncratic risk because it would specifically affect Amazon's delivery and logistics system, potentially impacting their costs and efficiency.