Which of the following statements is true?

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk, is associated with a particular company or industry and can be diversified away by investors through portfolio diversification. Therefore, it is relatively easy for investors to remove their exposure to unsystematic risk. On the other hand, systematic risk, also known as market risk, is associated with the overall market and cannot be diversified away. Hence, it is not easy for investors to remove their exposure to systematic risk. Therefore, statement (C) is true, while statements (A), (B), (D), and (E) are false.

Which of the Following Statements Is True