Q130
Company specific risk is also known as ________.
A.
Market risk
B.
Systematic risk
C.
Non-diversifiable risk
D.
Idiosyncratic risk
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Idiosyncratic risk, also known as unsystematic risk or residual risk or diversifiable risk, is risk that is not correlated to overall market risk – it is the risk of price change caused by the unique circumstances of a particular security, or the risk that is sector-specific or company-specific.