If an FIs Trading Portfolio of Stock Is Not Well-Diversified

question 99

Multiple Choice

If an FIs trading portfolio of stock is not well-diversified, the additional risk that must be taken into account is

• A)unsystematic risk.
• B)default risk.
• C)timing risk.
• D)interest rate risk.
• E)systematic risk.

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Definitions:

Income

The total amount of money earned or received by an individual or entity from various sources.

Price

The sum required, anticipated, or paid in currency as a swap for goods.

Miles

A unit of distance measurement equal to 5,280 feet or approximately 1.609 kilometers, commonly used in the United States.

Second-Class Tickets

Tickets offered by transportation services, such as trains or airplanes, that offer a lower level of comfort and amenities compared to first-class at a reduced price.