Which of the following is an example of diversifiable risk? a) Interest rates rising b) A stock market crash c) A company's CEO being arrested for fraud d) A terrorist event like 9/11

Q: Critically examine the risks faced by investors in international equities and give examples of how…

A: The risk that would be faced by investors in international equities are: High transaction cost One…

Q: Which of the following statement(s) are true?    In the situation of sovereign-debt crisis, the…

A: Sovereign debt is known as the debt of the central government. In this, the government issues debt…

Q: Do you agree that banks have high operating risks? Why?

A: The notion of operational risk in the banking system does not seem to be new. Nevertheless, it was…

Q: The SEC attempts to protect investors who are purchasing newly issued securities by making sure that…

A: Security exchange commission cannot provide the real value of securities to the investors as the…

Q: Match the following: Group of answer choices A. One of the largest buyers of U.S. subprime…

A: The financial markets are dynamic in nature and include various participants in the form of issuers,…

Q: What would happen to the standard of living in the United States if people lost faith in our…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Explain the problem of unknown risks for financial instruments in furthering the 2007-2009 financial…

A: Risk whose occurrence is unexpected i.e. which are not known in advance is known as unknown risk.…

Q: Which one of the following best describes systematic risk in owning the common stock of the Ford…

A: Systematic risk: Risk which cannot be diversifiable. Systematic risk will affect entire market…

Q: Explain how macro-prudential regulations work to limit systemic risk in the financial system.

A: Systematic risks are the risks involved within the firm functionality that can be predicted and that…

Q: Why is measuring interdependencies among assets' returns, or, volatilities, important in risk…

A: Risk management refers to forecasting and evaluating the level of risks and taking appropriate…

Q: Before the financial crisis, mortgage-backed securities were considered to be very safe investments.…

A: before the financial, crisis the value of mortgaged back securities was high in demand after…

Q: xplain how a financial crisis typically occurs. What are the stages of a financial crisis? Why…

A: A financial crisis seems to be any of a number of scenarios in which certain financial assets lose a…

Q: Which of the following is most true?   The nominal rate of a government long-term security can be…

A: Risk free rate is the theroetical rate of return on the invested amount and security and it is…

Q: In recent years the global economy has experienced recession levelsunprecedented since the Great…

A: Audit refers assessment of the financial statements and preparing a report, stating whether or not…

Q: Regarding the 2007-09 Financial Crisis, answer the following questions:   Was this a systemic or a…

A: There are various types of risks such as systemic risk, non-systemic risk, systematic risk and…

Q: Using the relevant financial securities and institutions, explain the chain of events which lead to…

A: The main reason behind the  financial crisis was the deregulation in the financial industry.

Q: please explain why insider trading is bringing harm to the capital market activity

A: When the investor's buying and selling the securities from the capital market  from the person who…

Q: The financial crisis of 2008-2009 spawned the concept of "systemic risk." What is meant by this…

A: Systematic risk is an important concept in the world of finance and investments.

Q: thorough explanation of the succesful and unsuccesful financial regulation that combat the 2008/9…

A: The financial crisis refers to the situation in which the value of a country's assets declines at a…

Q: nvestment banks’ risk-taking behaviour was the main cause of the financial crash of 2008. Discuss…

A: Financial crisis 2008:  The subprime mortgage crisis, also known as the financial crisis of 2007–08,…

Q: Systematic risk evaluates the probability and extent of negative consequences to the larger body.…

A: Explanation:- The stock market is the marketplace in which publicly listed firms' goods and services…

Q: Which of the following is a diversifiable risk?   Multiple Choice The risk that the economy will…

A: The risk in the investment is the variability in the stock returns. The risk can be of two types…

Q: Which of the following is an example of a systematic risk?     Bond investor invests in a Japanese…

A: U.S government announces an increase in corporate tax rate

Q: After some large companies were caught lying on their profit reports. in the 1980s, the tightened…

A: Stock market is place where the listed companies or companies who are registered on stock market can…

Q: Discuss the 2007-2008 financial crisis and what impact it had on the financial markets. Who was…

A: The 2007 financial crisis was caused by the subprime mortgage crisis, which itself was due to the…

Q: True or false A recent terrorist attack caused the US dollar to rise to unexpectedly high levels…

A: There are many types of risk related to currency fluctuation and exchange rate.

Q: Wall Street firms have traditionally compensated their traders with a share of the trading profits…

A: Meanwhile dealers’ advantage from proceeds but don't get penalized for losses, they were stimulated…

Q: what happens if a company doesn't manage risk ?

A: Risk management is important part of carrying the business activities. There are different types of…

Q: Buying common stock is riskier than buying a U.S Treasury bill. state reason in 'other'   true False

A: Common stock refers to the stock issued by public companies to the public for the purpose of raising…

Q: Which of the following factors reflect pure market risk for a given corporation?a. Increased…

A: Market risk is also known as systematic risk, it cannot be eliminated completely. The impact of…

Q: Inflation, recession, and high interest rates are economic events which are characterized as: A.…

A: Risk is defined as the term in which is the chance that actual returns differ from what is expected…

Q: The fallout from the financial crisis of 2008 included an overheated real estate market, fueled by…

A: Financial Statement:   It refers to the reports prepared by the company at the end of the financial…

Q: 6. Which of the following evaluates companies to determine if they are a safe or risky inveştment? *…

A: Companies' evaluation of risky or safe investment is carried out by credit rating agencies or firms.

Q: How can you protect yourself from fraud should you decide in the future to invest in stocks?

A: A stock exchange is a marketplace for the purchase and sale of stocks. However, when brokers,…

Q: What risk is due to changes in the level of interest rate in the economy and may affect industries…

A: Change in level of interest rate in the economy affects industries at the same time and is a major…

Q: Minsky’s instability hypothesis

A: Hyman Minsky was a famous American economist.

Q: Classify the following event as mostly systematic, mostly unsystematic: "An oil tanker ruptures,…

A: An oil tanker ruptures, creating a large oil spill" is an unsystematic risk

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.