Investment Risk Cannot Be Entirely Eliminated Through the Diversification of an Investment

question 5

Multiple Choice

Investment risk cannot be entirely eliminated through the diversification of an investment portfolio.This risk remaining after diversification is called:

• A)Diversifiable risk.
• B)Standard deviation.
• C)Systematic risk.
• D)Total risk.

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Definitions:

Irrational Appraisal

An evaluation or judgment of a situation or event that significantly distorts reality, often leading to inappropriate emotional or behavioral responses.

Albert Ellis

An American psychologist who developed Rational Emotive Behavior Therapy (REBT), a form of psychotherapy that emphasizes changing irrational beliefs.

Graduate School

An advanced program of study focused on a particular academic discipline or profession, typically following the completion of a bachelor's degree.

Rational Emotive Therapy

A form of cognitive-behavioral therapy focusing on changing irrational beliefs to alter emotional and behavioral responses.