Unsystematic risk:
A) Can be effectively eliminated through portfolio diversiﬁcation.
B) Is compensated for by the risk premium.
C) Is measured by beta.
D) Cannot be avoided if you wish to participate in the ﬁnancial markets.
E) Is related to the overall economy.

Question

Quizplus · Accepted Answer

Unsystematic risk can be effectively eliminated through portfolio diversification, as it is specific to individual stocks or assets and can be offset by including a variety of investments in a portfolio.

Unsystematic Risk