Q241
Unsystematic risk is______.
A.
the risk associated with movements in security prices
B.
reduced through diversification
AnswerC.
higher when interest rates rise
D.
the risk of loss of purchasing power
Answer: Option B
Solution
Answer: Option B
Solution:
Unsystematic risk is reduced through diversification. Unsystematic risk is the risk that is inherent in a specific company or industry. By investing in a range of companies and industries, unsystematic risk can be drastically reduced through diversification.