Question: 12.Climate change risk involves physical and transition risks. Which of the following statements is an example of transition risk for a coal-fired power plant? a.

12.Climate change risk involves physical and transition risks.

Which of the following statements is an example of transition risk for a coal-fired power plant?

a. Banks increase the amount they are willing to lend to the power plant because the market price of coal is forecast to increase.

b. Insurance companies increase the cost of premiums to be paid by the power plant.

c. Shareholders decrease their required rate of return on investment because the power-plant is becoming more valuable.

d. The coal fields are at greater risk of catching fire due to warmer air temperatures.

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