Five years ago,Shannon decided to start investing monthly in the common stock of ABC Telecom Company.Her financial well-being will be harmed if the price of ABC Telecom stock drops significantly.The risk of investment loss can be reduced if she invests in other companies and other types of financial assets.The risk Shannon faces with regard to her investments is a(n)

Question

Quizplus · Accepted Answer

The risk Shannon faces is diversifiable risk because it can be reduced by investing in a variety of assets, not just the stock of ABC Telecom Company. Diversifiable risk pertains to the potential for loss that can be mitigated through diversification, such as investing in different companies or types of financial assets.

Five Years Ago,Shannon Decided to Start Investing Monthly in the Common