Even if the portfolio is well diversified, the investor is still exposed to Blank______ risk.Multiple choice question.systematicmeanmultipliedunknown
Question
Even if the portfolio is well diversified, the investor is still exposed to Blank______ risk.Multiple choice question.systematicmeanmultipliedunknown
Solution
The correct answer is "systematic". Even with a well-diversified portfolio, an investor is still exposed to systematic risk. This type of risk, also known as market risk or non-diversifiable risk, is associated with market-wide risks that cannot be eliminated through diversification. Examples include interest rate changes, inflation, recessions, and political instability.
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