Many former employees at AlphaEnergy, an energy trading and supply company, had a large part of their portfolio invested in AlphaEnergy's stock. These employees were bearing a high degree of ________ risk.
A) unsystematic
B) systematic
C) market-specific
D) non-diversifiable

Question

Quizplus · Accepted Answer

Unsystematic risk is specific to a single company or industry. By having a large portion of their portfolio in AlphaEnergy's stock, these employees were exposed to risks that could affect AlphaEnergy specifically, rather than the market as a whole. Diversification could reduce this type of risk.

Many Former Employees at AlphaEnergy, an Energy Trading and Supply