Unsystematic Risk

question 46

Multiple Choice

Unsystematic risk:

• A) is the remaining risk in a well-diversified portfolio.
• B) is measured with beta.
• C) can be diversified away.
• D) all of the above

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Definitions:

Economists

Professionals who study how societies use resources to produce goods and services and distribute them among individuals.

Loss Aversion

The strong tendency to regard losses as considerably more important than gains of comparable magnitude—and, with this, a tendency to take steps (including risky steps) to avoid possible loss.

Affective Forecasting

Predicting one’s own emotional response to upcoming events.

Affective Forecasting

The process by which individuals predict their future emotional states in response to events or decisions.