Unsystematic risk
A)can be effectively eliminated through portfolio diversification.
B)is measured by beta.
C)is compensated for by the risk premium.
D)is nondiversifiable.
E)is related to the overall economy.

Question

Quizplus · Accepted Answer

Unsustainable risk can be effectively eliminated through portfolio diversification, as it is also known as diversifiable risk. By holding a diversified portfolio, investors can reduce their exposure to this type of risk.

Unsystematic Risk