The risk of a well-diversified portfolio depends only on the ________ risk of the assets in the portfolio.
A)systematic
B)nonsystematic
C)portfolio
D)investment

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, affects the overall market and cannot be eliminated through diversification. A well-diversified portfolio's risk is primarily dependent on this type of risk, as nonsystematic risk, specific to individual investments, can be largely diversified away.

The Risk of a Well-Diversified Portfolio Depends Only on the ________