Unsystematic risk is not relevant, because
A) it does not change.
B) it can be eliminated through diversification.
C) it cannot be eliminated through diversification.
D) it cannot be estimated.

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk or idiosyncratic risk, is the risk that is specific to a particular company or industry and can be eliminated through diversification. Therefore, it is not relevant to investors who hold well-diversified portfolios.

Unsystematic Risk Is Not Relevant, Because