Question

The FDA banning a specific product that a company sells is an example of:_________

a. Systematic risk that cannot be diversified away.
b. Company-specific risk that cannot be diversified away.
c. Market risk that can be diversified away.
d. Diversifiable risk that cannot be diversified away.
e. Unsystematic risk that can be diversified away.

Answer 1

Answer: unsystematic risk that can be diversified away

Step-by-step explanation:

The FDA banning a specific product that a company sells is an example of unsystematic risk that can be diversified away.

The above scenario is simply a company related risk and therefore an unsystematic risk but it can actually be diversified away by proper utilization and allocation of resources. Therefore, the correct option is E