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23 May, 12:29

A news flash just appeared that caused about a dozen stocks to suddenly drop in value by 20 percent. What type of risk does this news flash best represent?

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  1. 23 May, 14:56
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    The answer is an unsystematic risk. This is also known as a specific risk; this is a type of improbability that arises with the company or industry you capitalize in. This can be reduced through diversification. The best example for this is a drop in stocks like in this problem.
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