Question

the risk that your investment in a stock will lose value because the company’s labor force goes on strike is known as __________.

○ asset - backed risk

○ market risk

○ default risk

○ operational risk

Explanation:

To solve this, we analyze each option:

• Asset - backed risk is related to assets backing a security, not labor strikes.
• Market risk is due to market - wide factors like economic trends, not company - specific labor issues.
• Default risk is about a company failing to meet financial obligations, not labor strikes.
• Operational risk includes risks from internal processes, people, or systems, like a labor strike disrupting operations, which can reduce a stock’s value.

Answer:

D. operational risk