Depending on Its Type,a Relationship Is Usually Characterized in Three

question 37

Essay

Depending on its type,a relationship is usually characterized in three ways: by its presence,direction,and strength of association.Discuss these three ways of characterizing relationships and their meaning relative to association.

---

Definitions:

Diversifiable Risk

The risk associated with individual investments that can be reduced through diversification by investing in a variety of assets.

Unique Risk

Risk that is specific to a single asset or to a small group of assets, also known as unsystematic risk.

Unique Risk

Also known as unsystematic risk, it refers to the risk associated with a specific company or industry.

Diversifiable Risk

The portion of an investment's risk that can be reduced or eliminated through the practice of diversifying one's investment portfolio across various assets.