CFA Practice Question

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CFA Practice Question

Which of the following best describes the equity risk that arises from the nature of the firm's operating activities?

A. Unsystematic risk
B. Diversifiable risk
C. Financial risk
D. Business risk
E. Systematic risk
Correct Answer: D

User Contributed Comments 5

User Comment
sarath Business risk clearly comes from the firm's operating activities...
TreasureH Not diversifiable risk.
kolkata7 y unsystematic is not the ans?? its company specific...acc to me ans should be a & d
robbiecow At a very basic level with a lot of stuff stripped out, this is what I think the separating line is:

Unsystematic Risk: Risk involved when an individual invests in a particular firm or industry.
Business Risk: Risk involved when the firm invests in itself (i.e., uncertainty of operating earnings)
ewantanner On point RobbieCow
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