Examlex
While working in a forensic lab, you are given a bit of tissue to analyze. It has several layers. The upper surface consists of dead, flattened cells. As you move deeper into the tissue, the cells look healthier. The bottom layer of cells is actively dividing. Under the dividing layer is an acellular protein goo. You identify the sample as tissue.
Diversified Away
The risk that can be reduced or eliminated in a portfolio through investments in a variety of assets, thus not tied to the performance of a single investment.
Market Risk
The risk of losses in positions arising from movements in market prices.
Firm-specific Risk
The portion of an asset's risk that is attributable to the company's individual factors, uncorrelated with general market movements.
Nonsystematic Risk
The part of an investment's risk that is specific to the investment, unrelated to the market's overall movements.
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