A portfolio of many different stocks and bonds protects against nondiversiﬁable risk.

Name: A portfolio of many different stocks and bonds protects against nondiversiﬁable risk.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Nondiversifiable risk, also known as systematic or market risk, affects the entire market or economy and cannot be eliminated through diversification. Diversification mainly helps in reducing unsystematic risk, which is specific to a company or industry.

A Portfolio of Many Different Stocks and Bonds Protects Against