An example of a non-diversifiable risk for an investor


1. You are a risk averse individual. How much would you (most likely) be willing to pay to enter a gamble with the following outcomes: 40% of winning $400, 40% of winning $300, and $20% of winning $200? a. $350 b. $300 c. $250 d. You will not play for any amount.

2. An example of a non-diversifiable risk for an investor holding BP stock is that the company experienced a catastrophic oil spill in their Gulf of Mexico platform due to human errors. True or False?

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Financial Management: An example of a non-diversifiable risk for an investor
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