Which of these is the portion of total risk that is attributable to overall economic factors?
A) Firm specific risk
B) Market risk
C) Modern portfolio risk
D) Total risk

Question

Quizplus · Accepted Answer

Market risk, also known as systematic risk, is the portion of total risk that is attributable to overall economic factors such as changes in interest rates, inflation, and GDP. Firm specific risk, on the other hand, relates to factors specific to the company, such as management issues, supply chain disruptions, or lawsuits. Modern portfolio theory and total risk are broader concepts that encompass all types of risk in a portfolio.

Which of These Is the Portion of Total Risk That