Which one of the following risks is irrelevant to a well-diversified investor?
A)systematic risk
B)unsystematic risk
C)market risk
D)nondiversifiable risk
E)systematic portion of a surprise

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk or company-specific risk, can be diversified away by owning a diversified portfolio of securities. Therefore, it is irrelevant to a well-diversified investor. However, the other types of risk - systematic risk (A and E), market risk (C), and nondiversifiable risk (D) - are relevant to all investors, regardless of the diversification of their portfolio.

Which One of the Following Risks Is Irrelevant to a Well-Diversified