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9. Which one of the following is an example of systematic risk? A. Investors panic causing stock prices around the globe to fall precipitously B.
9. Which one of the following is an example of systematic risk? A. Investors panic causing stock prices around the globe to fall precipitously B. A flood washes away a firm's warehouse C. A city imposes an additional one percent sales tax on all products D. A toymaker has to recall its top-selling toy E. Com prices increase due to increased demand for alternative fuels 10. The principle of diversification tells us that: A. concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk. B. concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk. C. spreading an investment across five diverse companies will not lower the total risk. D. spreading an investment across many diverse assets will eliminate all of the systematic risk. E. spreading an investment across many diverse assets will eliminate some of the total risk
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