In designing a portfolio, relevant risk is
A) total risk.
B) unsystematic risk.
C) event risk.
D) nondiversifiable risk.

Question

Quizplus · Accepted Answer

Nondiversifiable risk, also known as systematic or market risk, is the relevant risk in portfolio design because it cannot be eliminated through diversification. Unsystematic risk can be mitigated through diversification, making nondiversifiable risk the primary concern.

In Designing a Portfolio, Relevant Risk Is