The Risk That Can Be Diversified Away in a Portfolio

question 22

Multiple Choice

The risk that can be diversified away in a portfolio is referred to as ___________. I) diversifiable riskII) unique riskIII) systematic riskIV) firm-specific risk

• A) I, III, and IV
• B) II, III, and IV
• C) III and IV
• D) I, II, and IV
• E) I, II, III, and IV

---

Definitions:

Sales

The revenue a company earns from selling goods or services.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting operating expenses, interest, and taxes.

Expense

Outflows or using up of assets as a result of the company’s efforts to generate revenue.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ultimately revealing the net profit or loss for that time.