The risk premium of a share is not affected by it?

Question

Quizplus · Accepted Answer

The risk premium of a share is directly affected by systematic risk, which is the risk stemming from factors affecting the overall market, and undiversifiable risk, which is the risk that cannot be diversified away. However, unsystematic risk, which is the risk that is unique to a particular company or industry, can be diversified away and therefore does not affect the risk premium of a share. "Typical risk" is not a commonly used term in finance, but if it refers to either systematic or unsystematic risk, the answer would still be A.

The Risk Premium of a Share Is Not Affected by It