The Type of the Risk That Can Be Eliminated by Diversification

question 17

Multiple Choice

The type of the risk that can be eliminated by diversification is called

• A)market risk.
• B)unique risk.
• C)interest rate risk.
• D)default risk.

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Definitions:

Practicality

The aspect of being sensible, realistic, and focused on what is achievable or effective in real-life situations.

Critical Thinkers

Individuals who actively engage in analysis, evaluation, and synthesis of information to solve problems and make informed decisions.

Questioning

The process of expressing doubt or seeking information about something.

Cynical

Having a belief that people are motivated purely by self-interest; skeptical of the motives of others.