If an investor buys enough stocks,he or she can,through diversification,eliminate all of the market risk inherent in owning stocks,but as a general rule it will not be possible to eliminate all company-specific risk.

Question

Quizplus · Accepted Answer

Diversification can help reduce company-specific risk (also known as unsystematic risk), but it cannot eliminate market risk (systematic risk), which affects all investments broadly.

If an Investor Buys Enough Stocks,he or She Can,through Diversification,eliminate