Company specific risk is also known as ________.
A. Market risk
B. Systematic risk
C. Non-diversifiable risk
D. Idiosyncratic risk
Answer: Option D
Solution(By Examveda Team)
Idiosyncratic risk, also known as unsystematic risk or residual risk or diversifiable risk, is risk that is not correlated to overall market risk – it is the risk of price change caused by the unique circumstances of a particular security, or the risk that is sector-specific or company-specific.This Question Belongs to Commerce >> Financial Management
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Investment is the _______________.
A. net additions made to the nation’s capital stocks
B. person’s commitment to buy a flat or house
C. employment of funds on assets to earn returns
D. employment of funds on goods and services that are used in production process
Financial Management is mainly concerned with ______________.
A. All aspects of acquiring and utilizing financial resources for firms activities
B. Arrangement of funds
C. Efficient Management of every business
D. Profit maximization
The primary goal of the financial management is ____________.
A. to maximize the return
B. to minimize the risk
C. to maximize the wealth of owners
D. to maximize profit
In his traditional role the finance manager is responsible for ___________.
A. proper utilisation of funds
B. arrangement of financial resources
C. acquiring capital assets of the organization
D. efficient management of capital
Company specific risk is also known as diversifiable risk. Company risk is the financial uncertainty faced by an investor who holds securities in a specific firm.
Idiosyncratic risk is a type of investment risk that is endemic to an individual asset (like a particular company's stock), or a group of assets (like a particular sector's stocks), or in some cases, a very specific asset class (like collateralized mortgage obligations). Answer should be D.