Portfolio risk is comprised of:
A) systematic and market risk
B) unsystematic and microeconomic risk
C) systematic and unsystematic risk
D) systematic and macroeconomic risk

Question

Quizplus · Accepted Answer

Portfolio risk is composed of two types of risks: systematic risk, also known as market risk, and unsystematic risk. Systematic risk affects the entire market and cannot be diversified away, while unsystematic risk is specific to individual securities and can be mitigated through diversification. Therefore, the correct answer is C, which describes the two types of risks that contribute to overall portfolio risk.

Portfolio Risk Is Comprised Of