Unsystematic risk is
A)the risk associated with movements in stock prices
B)reduced through diversification
C)higher when interest rates rise
D)the risk of loss of purchasing power

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk, is unique to a particular company or industry and can be reduced through diversification. This is because unsystematic risk affects only a specific company or industry, not the market as a whole, so by investing in a variety of assets, the impact of any one security's performance is minimized.

Unsystematic Risk Is