Total risk is the sum of a security's nondiversifiable and diversifiable risk.

Name: Total risk is the sum of a security's nondiversifiable and diversifiable risk.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Total risk can be broken down into nondiversifiable or systematic risk, which cannot be eliminated through diversification, and diversifiable or unsystematic risk, which can be reduced through diversification. Therefore, total risk is the sum of both types of risk.

Total Risk Is the Sum of a Security's Nondiversifiable and Diversifiable