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Company Risk |
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Company Risk Risk that might cause a loss to one company but not to other, similar companies. An example of company risk is the possibility of a strike by a company's employees. One may mitigate company risk by buying securities of multiple companies in the same industry. For example, a particular oil company has the company risk that it may drill little or no oil in a given year. An investor may mitigate this risk by investing in several different oil companies. Company risk is a type of nonsystematic risk.
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