Unsystematic Risk

question 99

Multiple Choice

Unsystematic risk:

• A)can be effectively eliminated through portfolio diversification.
• B)is compensated for, by the risk premium.
• C)is measured by beta.
• D)cannot be avoided if you wish to participate in the financial markets.
• E)is related to the overall economy.

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Definitions:

Sign Stimulus

An external sensory cue that triggers a specific innate behavior in animals and humans.

Instincts

Innate, biologically determined behavior patterns common to all members of a species that are exhibited by all individuals in the absence of learning or experience.

Physiological State

The condition of the body or bodily functions at a given time, taking into account both internal and external factors.

Homeostasis

The body’s tendency to maintain an equilibrium, or steady state.