Why corporations manage idiosyncratic risk

Reference no: EM133266789

Assignment:

The lecture notes gave at least four general categories of rationales for why corporations manage idiosyncratic risk in a manner consistent with risk aversion (such as buying insurance as opposed to their simply diversifying away idiosyncratic risk in the capital markets). State four of these categories of reasons why corporations may be motivated to behave in what on the surface looks to be consistent with risk aversion (such as buying insurance) with a brief explanation or illustration of what each means.

Reference no: EM133266789

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