In constructing a portfolio of investments,you can eliminate random risk but not market risk.

Question

Quizplus · Accepted Answer

Random risk, also known as unsystematic risk, can be reduced or eliminated by diversifying your investments across different asset classes and industries. However, market risk, also known as systematic risk, cannot be completely eliminated as it affects the entire market and is influenced by macroeconomic factors such as inflation, interest rates, and geopolitical events. Therefore, it is important to consider and manage market risk when constructing a portfolio.

In Constructing a Portfolio of Investments,you Can Eliminate Random Risk