Asked by Vanessa Jimenez on Jun 07, 2024
Verified
The inclusion of thirty highly diverse securities in a portfolio eliminates the bulk of the ___ risk.
A) Market.
B) Unique.
C) Unexpected.
D) Expected.
E) Inflation.
Unique Risk
Also known as unsystematic risk, it refers to the risk associated with a specific company or industry that can be mitigated through diversification.
Market Risk
The risk of losses in investments due to factors that affect the overall performance of the financial markets.
Inflation Risk
The danger that the value of financial returns or purchasing power will be eroded as inflation diminishes the value of money over time.
- Understand the nature of diversified and non-diversified risk in portfolio management.
Verified Answer
Learning Objectives
- Understand the nature of diversified and non-diversified risk in portfolio management.
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