Diversiﬁable risks:
A) Are measured by beta.
B) Affect the entire market.
C) Are systematic in nature.
D) Are rewarded in the market place.
E) Are also referred to as unique risks.

Question

Quizplus · Accepted Answer

Diversifiable risks, also known as unsystematic risks or unique risks, are risks that are specific to a particular company or industry and can be reduced through diversification. They are not rewarded in the market place and are not measured by beta. Systematic risks, on the other hand, are risks that affect the entire market or a particular segment of the market, and are measured by beta.

Diversiﬁable Risks