That Portion of a Stock's Risk or Variability That Cannot

question 266

Multiple Choice

That portion of a stock's risk or variability that cannot be eliminated through investor diversification is called ________ risk.

• A)unsystematic
• B)systematic
• C)unrealistic
• D)inflation
• E)volatility

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Definitions:

Initial Public Offering (IPO)

The first sale of stock by a private company to the public, transitioning it into a publicly traded company.

Firm-Commitment Underwriting

A type of underwriting where the underwriter buys the entire issue of securities from the issuer and sells them to investors at a profit.

Underwriter

An individual or organization that evaluates and assumes another's risk for a fee, such as with insurance policies or issuing of securities.

NASDAQ System

An electronic system and marketplace for buying and selling securities, particularly known for its high concentration of technology companies.