Problem: In the following 3 scenarios, identify if they represent a diversifiable or an undiversifiable risk. Consider these scenarios in terms of the viewpoint of investors and explain it.
The 3 scenarios are:
1. A a large hurricane severely damages a major us city
2. A substantial unexpected drop in the price of oil
3. The CEO of a major corporation is found to be guilty by a jury and sentenced to 6 months in jail.