Refer to Scenario 13.1. Your negotiations are an example of:

How can diversification reduce idiosyncratic risk but not systematic risk?

What will be an ideal response?

Single-owner proprietorships often unintentionally exaggerate their profits because they

A) forget their explicit losses. B) look at after-tax instead of pre-tax costs. C) pay their bills late and therefore incur large interest charges. D) neglect to consider the opportunity cost of the owner's labor.