managerial judgments or unforeseen negative events that happen to a firm are defined as "company-specific," or "unsystematic," events, and their effects on investment risk can in theory be diversified away.

Question

Quizplus · Accepted Answer

Company-specific events are unique to a particular firm and can be diversified away through proper portfolio diversification, reducing investment risk.

Managerial Judgments or Unforeseen Negative Events That Happen to a Firm