The total risk of a stock is a combination of __________ risk and __________ risk.
A) unsystematic; diversifiable
B) asset-specific; diversifiable
C) market; unsystematic
D) unsystematic; nondiversifiable
E) unique; asset-specific

Question

Quizplus · Accepted Answer

The total risk of a stock is typically divided into market risk, which is non-diversifiable and cannot be eliminated through diversification, and unsystematic risk, which can be eliminated through diversification. Market risk is the risk a stock faces due to the overall performance of the market or economy, while unsystematic risk is the risk related to a specific company, industry or sector. Therefore, option C is the correct answer.

The Total Risk of a Stock Is a Combination of __________