Risk that affects a large number of assets,each to a greater or lesser degree,is called ________ risk.
A)idiosyncratic
B)diversifiable
C)systematic
D)asset-specific
E)total

Question

Quizplus · Accepted Answer

Systematic risk affects the entire market or economy and cannot be diversified away, whereas idiosyncratic or diversifiable risk only affects individual assets or a small group of assets and can be mitigated through diversification. Asset-specific risk only affects a specific asset or group of assets, while total risk is the combination of both systematic and idiosyncratic risk for an individual asset.

Risk That Affects a Large Number of Assets,each to a Greater