Systematic Risk Is Relevant to a Well-Diversified Investor

question 291

True/False

Systematic risk is relevant to a well-diversified investor.

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Definitions:

Dual-Process Theory

The proposal that judgment involves two types of thinking: a fast, efficient, but sometimes faulty set of strategies, and a slower, more laborious, but less risky set of strategies.

System II

Often refers to a mode of thinking that is slower, more deliberative, and more logical than fast, automatic, intuitive responses (System I thinking).

Quantifiable

Capable of being measured or expressed as a quantity, enabling numerical assessment or comparison.

System II

A term often used in psychology to describe the deliberative, analytical form of cognition that requires concentration and is slower than intuitive thinking.