Final answer:
Unsystematic risk affects a specific firm and firms in a single industry due to company-specific events, and can be mitigated by diversification. It does not affect the market as a whole, nor does it automatically impact all manufacturing firms.
Step-by-step explanation:
Unsystematic risk refers to the risk of price change in a company's stock or the financial performance of any single company due to company-specific events or factors. Select all that apply regarding to what unsystematic risk will affect:
- A specific firm.
- Firms in a single industry.
Thus, the correct answers are A) A specific firm and C) Firms in a single industry. Unsystematic risk does not affect the market as a whole, which is subject to systematic risk instead.
Additionally, it does not automatically affect all manufacturing firms unless they are facing a specific industry-wide issue, which could then be classified under unsystematic risk for that particular industry. Diversification is a strategy to mitigate unsystematic risk.