You invested in Facebook, and you're a diversified investors. Which of the following risks concern you...

You invested in Facebook, and you're a diversified investors. Which of the following risks concern you the most?

a.

The risk that a global economic slowdown will affect how much companies spend on advertising

b.

The risk that users will find a different social media platform to spend their time on.

c.

The risk that Mark Zuckerberg will stay on as CEO

d.

The risk that Mark Zuckerberg will leave as CEO

e.

The risk that new privacy laws will restrict data gathering and access

Expert Solution

Answer is Option A. The risk that a global economic slowdown will affect how much companies spend on advertising.

Facebook's 90%-98% of revenue is from advertisement. If the companies starts to spend less on ads on facebook the revenue will get down. because cost of advertising on faceboo is very high. It roses to nearly 219%. If a global economic slowdown occurs companies may reduce spending on their ads. So it will affect you as an investor.

The second risk concern will be that the users find a different social media platform for spend their time on.Facebook have a lot of rivals in the field of social media s. They have bought a popular app and instagram for 19 & 1 billion. These two apps were the main rivals of facebook and to which the people users were drawn away. But facebook can't buy every apps that come as their rivals. Present rivals are Snapchat Twitter etc. Facebook tried to buy snapchat but the attempt failed for some reason.

jeff jeffy answered 2 years ago

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