The relevant portion of an asset's risk attributable to market factors that affect all firms is called
A) unsystematic risk.
B) systematic risk.
C) diversifiable risk.
D) none of the above.

Question

Quizplus · Accepted Answer

Systematic risk refers to the portion of risk that is associated with market factors affecting all firms. Unsystematic risk or diversifiable risk, on the other hand, refers to the risk that is specific to a particular company or industry and can be diversified away by investing in a diversified portfolio of assets.

The Relevant Portion of an Asset's Risk Attributable to Market