Roger Determines That If Aim Corporation Has High Revenues, Then

Multiple Choice

Roger determines that if Aim Corporation has high revenues, then Zest Corporation will have low revenues, and that if Aim Corporation has low revenues, Zest Corporation will have high revenues. He buys stock in both corporations.

A) He has reduced firm-specific risk but not market risk.
B) He has reduced market risk, but not firm-specific risk.
C) He had reduce both firm-specific risk and market risk.
D) He has reduced neither firm-specific risk nor market risk.