Which of the Following Risk Types Can Be Diversified by Adding

question 115

Multiple Choice

Which of the following risk types can be diversified by adding stocks to a portfolio?

• A) Systematic risk
• B) Unique risk
• C) Market risk
• D) All of these

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Definitions:

Environmental Scan

The process of systematically examining external and internal environments to identify opportunities, threats, trends, and strategic uncertainties.

Direct Forecast

A method of predicting future values such as sales or trends by directly analyzing specific variables or indicators.

Forecast

A prediction or estimate of future trends, events, or conditions, often based on current data or trends.

Intervening Steps

The stages or actions that occur between the start and completion of a process, often involving intermediary tasks or decisions.