This Is Defined as the Portion of Total Risk That

question 62

Multiple Choice

This is defined as the portion of total risk that is attributable to firm or industry factors and can be reduced through diversification.

• A) firm specific risk
• B) market risk
• C) modern portfolio risk
• D) total risk

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Definitions:

Specific Assets

Assets identifiable and unique to a company, such as patents, trademarks, or proprietary technology.

Appreciation

An increase in the value of an asset over time, enhancing its worth and purchasing power.

Coupon Bond

A bond that pays the holder a fixed interest rate (coupon) payment over the bond's lifespan, with the principal paid back at maturity.

Zero Coupon Bond

A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, offering profit at maturity when the bond is redeemed for its full face value.