That portion of a stock's risk or variability that can be eliminated through investor diversification is called ________ risk.
A)unsystematic
B)systematic
C)volatility
D)inflation
E)portfolio

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific or diversifiable risk, is the portion of a stock's risk that is specific to the individual company and can be reduced through diversification. Systematic risk, on the other hand, cannot be eliminated through diversification and is related to market-wide factors such as economic conditions, political events, and interest rates. Volatility, inflation, and portfolio risks are all broader concepts that do not specifically relate to a single stock's risk.

That Portion of a Stock's Risk or Variability That Can