Unsystematic risk is
A)the remaining risk in a well-diversified portfolio.
B)measured with beta.
C)diversifiable.
D)all of the above.

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as diversifiable risk, can be reduced through diversification of investments. It is specific to an individual company or industry and can be mitigated by holding a diversified portfolio. Beta measures systematic risk, which is market-related risk that cannot be diversified away. Therefore, Choices A and B are incorrect.

Unsystematic Risk Is