The risk that is limited to a particular firm is also known as _____.
A)unsystematic risk
B)non-diversifiable risk
C)market risk
D)relevant risk
E)combined risk

Question

The risk that is limited to a particular firm is also known as _____. 
A)unsystematic risk
B)non-diversifiable risk
C)market risk
D)relevant risk
E)combined risk

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk or diversifiable risk, is the risk that is limited to a particular firm or industry. This type of risk can be reduced or eliminated through diversification. Non-diversifiable risk (B) refers to the risk that cannot be eliminated through diversification, such as market risk. Market risk (C) is the risk that affects all investments in the market, while relevant risk (D) and combined risk (E) are not commonly used terms in finance.

The Risk That Is Limited to a Particular Firm Is