Non-systematic risk is also referred to as
A)market risk, diversifiable risk.
B)firm-specific risk, market risk.
C)diversifiable risk, market risk.
D)diversifiable risk, unique risk.
E)none of the above.

Question

Quizplus · Accepted Answer

Non-systematic risk is also known as firm-specific risk or unique risk, which can be diversified away by holding a diversified portfolio of investments. On the other hand, systematic risk, also called market risk, affects the overall market and cannot be diversified away. Therefore, option D, diversifiable risk, unique risk, is the correct answer. Options A, B, and C include market risk, but they do not address non-systematic or firm-specific risk specifically.

Non-Systematic Risk Is Also Referred to as