Diversifiable risk is also referred to asA. systematic risk, unique risk.B. systematic risk, market risk.C. unique risk, market risk.D. unique risk, firm-specific risk.E. none of the above.
Question
Diversifiable risk is also referred to asA. systematic risk, unique risk.B. systematic risk, market risk.C. unique risk, market risk.D. unique risk, firm-specific risk.E. none of the above.
Solution
D. unique risk, firm-specific risk.
Diversifiable risk, also known as unsystematic risk, is a type of risk that is specific to a particular company or industry. It can be reduced or eliminated through diversification – by owning a range of different investments in different companies or industries. This is why it's also referred to as unique risk or firm-specific risk.
Similar Questions
Which of the following best describes the concept of 'systematic risk' A. Risk that can be eliminated through diversification B. Risk associated with a particular company or industry C. Risk that affects the entire market and cannot be eliminated through diversification D. Risk of changes in regulatory policies
Systematic risk is also called Blank______ risk.Multiple choice question.diversifiableindustry-specificmarketworldwide
Which of the following risk(s) is (are) diversifiable?Select one or more alternatives:The risk that short-term interest rates increase unexpectedly.The risk that an oil tanker ruptures, creating a large oil spill.The risk of global pandemic.The risk that is going to rain tomorrow.
Investors can eliminate what type of risk by diversifying?a.Total riskb.Unsystematic riskc.Beta riskd.Systematic risk
Diversifying an investment portfolio allows the reduction of unsystematic risk to a minimum.This Statment Is True OR FLSE
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.