Unique risk is the only risk that investors require compensation for bearing.

Name: Unique risk is the only risk that investors require compensation for bearing.
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

According to the Capital Asset Pricing Model (CAPM), investors require compensation only for the unique risk associated with an investment, which cannot be diversified away through portfolio diversification. This unique risk is also known as systematic risk or market risk. Therefore, the statement is true.

Unique Risk Is the Only Risk That Investors Require Compensation