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:

Net Income

Net income is the profit a company has after all expenses, taxes, and costs have been deducted from total revenue, indicating the company's financial health.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Price-Earnings Ratio

A financial measurement for equities determined by dividing the share's market price by its earnings per share.

Market Price

The immediate price point at which assets or services can be exchanged in the market.