What is the name given to the risk associated with an asset's return arising from the covariance of the return on a large,well-diversified portfolio?

Question

Quizplus · Accepted Answer

The risk associated with an asset's return arising from the covariance of the return on a large, well-diversified portfolio is called systematic risk. This type of risk cannot be diversified away as it is related to the overall market or economy. A and C are incorrect as they refer to types of specific risk that can be diversified away through proper asset allocation. D is incorrect as risk premium is the excess return required to compensate for the risk taken.

What Is the Name Given to the Risk Associated with an Asset's