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Economics

For each of the following, state whether it is a result of firm-specific risk or market risk.

a. Markets crash, leading to a global recession

b. The owners and managers of a firm decide to short-sell stock in the firm and drive the firm to bankruptcy, destroying the value of shares in the firm

c. A report of health risks associated with a new drug lowers returns on a pharmaceutical company.

d. A meteor hits the earth, drastically lowering stock returns.

e. Suppose a tech bubble bursts, which greatly affects tech stocks and marginally affects other stocks. Does this fit neatly into either category?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91230515

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