___________risk represents the portion of an asset's risk that can be eliminated by combining assets with less than perfect positive correlation.
A) Nondiversifiable
B) Diversifiable
C) Total
D) Systematic

Question

Quizplus · Accepted Answer

Diversifiable risk, also known as unsystematic risk or specific risk, refers to the portion of an asset's risk that can be eliminated through diversification. By combining assets with less than perfect positive correlation, the overall risk of the portfolio can be reduced. On the other hand, nondiversifiable risk (or systematic risk) cannot be eliminated through diversification and is inherent in the overall market or economy. Thus, the best choice is B, as it directly relates to the concept of diversification.

___________Risk Represents the Portion of an Asset's Risk That Can