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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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User Dr Deo
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1 Answer

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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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User AmbGup
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