That Part of a Security's Risk Associated with Random Outcomes

question 12

Multiple Choice

That part of a security's risk associated with random outcomes generated by events or behaviors, specific to the firm is also known as the _____.

• A) nondiversifiable risk
• B) unsystematic risk
• C) market risk
• D) systematic risk
• E) relevant risk

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Definitions:

Tax Bracket

Ranges of income set by the government that determines the rate at which income is taxed.

Long-Term

Refers to holding an asset for more than a year before disposal, affecting the calculation of capital gains and losses for tax purposes.

Short-Term Gain

A profit from the sale of an asset held for one year or less.

Investment Portfolio

An assortment of financial assets including stocks, bonds, commodities, cash, and equivalents, such as mutual funds and exchange-traded funds (ETFs).