A company faces two kinds of risk. An idiosyncratic risk is that a competitor might enter its

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A company faces two kinds of risk. An idiosyncratic risk is that a competitor might enter its market and take some of its customers. An aggregate risk is that the economy might enter a recession, reducing sales.

Which of these two risks would more likely cause the company’s shareholders to demand a higher return? Why?

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Economics

ISBN: 9781408093795

3rd Edition

Authors: Mark P. Taylor, N. Gregory Mankiw

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Question Posted: Nov 04, 2024 07:01 AM

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A company faces two kinds of risk. An idiosyncratic risk is that a competitor might enter its

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Economics

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