Which One of the Following Statements Applies to Unsystematic Risk

question 14

Multiple Choice

Which one of the following statements applies to unsystematic risk?

• A)It can be eliminated through portfolio diversification.
• B)It is also called market risk.
• C)It is a type of risk that applies to most, if not all, securities.
• D)Investors receive a risk premium as compensation for accepting this risk.
• E)This risk is related to expected returns.

---

Definitions:

Wilhelm Wundt

Known as the father of experimental psychology, he established the first psychology laboratory at the University of Leipzig in 1879.

Observable Behavior

Actions of an individual that can be seen or measured directly, as opposed to thoughts or feelings which are internal.

Inner Sensations

Personal feelings and perceptions that occur within oneself, often not observable by others.

American Philosopher

A thinker from the United States who contributes to the field of philosophy, dealing with subjects such as ethics, logic, metaphysics, and epistemology.