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Neil's Nails manufactures fasteners for use in construction projects. Given that the construction demand is highly tied customer's willingness and ability to expand, business for
Neil's Nails manufactures fasteners for use in construction projects. Given that the construction demand is highly tied customer's willingness and ability to expand, business for Neil's has dropped off during COVID-19 restrictions. What type of risk is the strong relationship between general economic outcomes and Neil's cash flows, and assuming stocks are priced correctly using CAPM do investors need to be compensated for bearing this risk? Systematic risk: Yes, investors need to be compensated for this risk Firm-specific risk: No, investors do not need to be compensated for this risk Systematic risk: No, investors do not need to be compensated for this risk Firm-specific risk: Yes, investors need to be compensated for this risk
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