Systematic risk can be eliminated through portfolio diversification.

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, is the risk that affects the overall market or economy and cannot be eliminated through diversification. This includes factors such as inflation, recession, and changes in interest rates. While diversification can help to reduce the impact of specific risks associated with individual investments, it cannot eliminate systematic risk altogether.

Systematic Risk Can Be Eliminated Through Portfolio Diversification