Lesson 2

Question 1

refer to chances that the OUTCOME OF AN EVENT IS FAVORABLE OR UNDESIRABLE.
is a chance or possibility of danger, loss, injury, and the like

Answer 1

Risks

Question 2

also called UNDIVERSIFIABLE RISK OR MARKET RISK. It results from general market and economic conditions that cannot be diversified away.

Answer 2

Systematic Risk

Question 3

sometimes called DIVERSIFIABLE RISK, residual risk, or company specific risk

Answer 3

Unsystematic Risk