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________is essentially eliminated by diversification, so a relatively large portfolio has almost no ___________. a.Unsystematic risk...

________is essentially eliminated by diversification, so a relatively large portfolio has almost no ___________.

a.Unsystematic risk / Diversifiable risk

b.Variance / variance

c.Systematic risk / Diversifiable risk

d.Systematic risk / Market risk

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Answer #1

Answer : a : Unsystematic risk/ Diversifiable risk (Thumbs up please)

There are 2 types of risks : systematic risk and unsystematic risk.

systematic risk is also known as market risk and so it is same for all kinds of industries and firms.

unsystematic risk is specific to a company, so it is also called unique risk.

If we want to reduce this unsystematic risk, we can have portfolio, which will help in reducing such risk.

variance is a risk which is a risk of holding a single stock.

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