As we add more diverse securities to a portfolio,the ________ risks of the portfolio will decrease.
A)total and systematic
B)systematic and unsystematic
C)total and unsystematic
D)unsystematic
E)systematic

Question

Quizplus · Accepted Answer

As we add more diverse securities to a portfolio, the unsystematic risks of the portfolio will decrease. This is because unsystematic risk is specific to a particular security or industry, and by diversifying across different securities and industries, we can reduce the impact of any one security or industry on the overall portfolio.

As We Add More Diverse Securities to a Portfolio,the ________