The risk that can be diversified away is ________.
A) beta
B) firm-specific risk
C) market risk
D) systematic risk

Name: The risk that can be diversified away is ________. A) beta B) firm-specific risk C) market risk D) systematic risk
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Question

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Firm-specific risk, also known as idiosyncratic risk, can be diversified away by investing in a diversified portfolio of stocks. Beta, market risk, and systematic risk cannot be diversified away as they are inherent to the overall market and economy.

The Risk That Can Be Diversified Away Is ________