Which of the following is an example of diversifiable risk.
A) An economic downturn due to overcapacity in many industries worldwide.
B) Geopolitical uncertainty caused by differing government policies.
C) The global threat of terrorism and war.
D) The insider trading activities of the company's executives.

Question

Quizplus · Accepted Answer

Diversifiable risk refers to risks that can be reduced or eliminated by diversifying a portfolio, such as company-specific events like insider trading. A, B, and C are examples of systematic risk, which affects the entire market or economy and cannot be reduced through diversification.

Which of the Following Is an Example of Diversifiable Risk