Which one of the following statements is true?
A)A well-diversified portfolio has negligible systematic risk.
B)A well-diversified portfolio has negligible unsystematic risk.
C)An individual security has negligible systematic risk.
D)An individual security has negligible unsystematic risk.
E)Both a well-diversified portfolio and an individual security have negligible unsystematic risk.

Question

Quizplus · Accepted Answer

A well-diversified portfolio can still have systematic risk, as it is related to the overall market, while unsystematic risk can be minimized through diversification. An individual security can still have systematic risk as well. Therefore, option B is the only true statement.

Which One of the Following Statements Is True