Diversifying a portfolio to eliminate unsystematic risk is one of the major benefits of investing in mutual funds.

Question

Quizplus · Accepted Answer

Diversifying a portfolio by investing in a variety of stocks or other assets can help to reduce unsystematic risk, or risk that is unique to a specific company or industry. Mutual funds are a convenient way to achieve diversification, as they hold a diverse range of securities within a single investment vehicle. Therefore, it is true that investing in mutual funds can help to eliminate unsystematic risk.

Diversifying a Portfolio to Eliminate Unsystematic Risk Is One of the Major