Risk that affects at most a small number of assets is called ________ risk.
A)portfolio
B)nondiversifiable
C)market
D)unsystematic
E)total

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk or idiosyncratic risk, only affects a small number of assets and can be diversified away through portfolio diversification. Therefore, it is the best fit for the given description. Portfolio risk (A), market risk (C), and total risk (E) all refer to the overall risk of a portfolio or market, while nondiversifiable risk (B) is systematic risk that affects the entire market and cannot be eliminated through diversification.

Risk That Affects at Most a Small Number of Assets