Diversification will not help to reduce Select one: a. Overall risk b. Systematic risk c. Idiosyncratic...

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Diversification will not help to reduce Select one: a. Overall risk b. Systematic risk c. Idiosyncratic...

Diversification will not help to reduce

Select one:

a. Overall risk

b. Systematic risk

c. Idiosyncratic risk

business finance

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Answer 1

Answer #1

Systematic risk can never be managed by diversification and diversification is just applicable for management of company specific risk or unsystematic risk so systematic risk will not be managed by diversification.

Systematic risk refers to risk related to the overall economy and it is beyond the control of the firm.

Correct answer will be option (b) Systematic risk.

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Answer 2

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