Unsystematic risk:
A) Can be effectively eliminated through portfolio diversification.
B) Is compensated for by the risk premium.
C) Is measured by beta.
D) Cannot be avoided if you wish to participate in the financial markets.
E) Is related to the overall economy.

Question

Quizplus · Accepted Answer

Unsystematic risk is specific to a company or industry and can be reduced or eliminated through diversification, unlike systematic risk which affects the entire market.

Unsystematic Risk