Match each type of non-systematic risk to the portfolio scenario that best illustrates its primary impact.
- Business RiskA manufacturing firm suffers a sharp drop in equity valuation due to poor executive decisions and a failed product launch.
- Credit RiskA corporate bond issuer experiences operational insolvency and fails to make its scheduled semi-annual interest payment to debt holders.
- Financial RiskA company with an unusually high debt-to-equity ratio experiences severe earnings volatility that threatens its ability to service debt during an economic downturn.
- Liquidity RiskAn investor holding thin-market municipal bonds must accept a significant price discount to sell the position rapidly.
Cevap
Business Risk matches with the scenario involving equity valuation drops from poor management decisions; Credit Risk matches with the scenario where a bond issuer defaults on interest payments; Financial Risk matches with the scenario involving high leverage and fixed debt obligations; Liquidity Risk matches with the scenario where an investor must discount thin-market bonds to execute a quick sale.
Each risk term accurately corresponds to its defining operational or market scenario. Credit risk specifically concerns issuer default on obligations; business risk addresses corporate management and operational performance; financial risk centers on debt ratio/leverage capital structure; liquidity risk concerns marketability and rapid execution without price concessions.
Adım Adım Çözüm
Anahtar Kavram
Non-Systematic and Credit Risks