Investors should expect to be compensated for bearing ____ risk,but they should not expect to be compensated for bearing ____ risk.

Question

Quizplus · Accepted Answer

Investors should expect to be compensated for bearing systematic risk, which affects the entire market or a large segment of it, because it cannot be eliminated through diversification. Unsystematic risk, on the other hand, is specific to a single company or industry and can be mitigated through diversification, so investors should not expect extra compensation for it.

Investors Should Expect to Be Compensated for Bearing ____ Risk,but