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.

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Definitions:

Defense Mechanism

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Psychosexual Stages

A Freudian theory describing how personality develops through five stages from infancy to adulthood, centered on sexual pleasure from specific body areas.

Phallic Stage

A phase in Freudian psychosexual development, occurring roughly between the ages of three and six, where the libido's focus is on the genital organs.

Gender Identity

An individual's personal sense of their own gender, which may or may not correspond with the sex they were assigned at birth.