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Which statement best describes the way a catalyst works?
Market Risk
The potential for a loss faced by an investor, which is attributed to elements that influence the total performance of the financial markets.
Firm-specific Risk
The portion of a company's risk that is attributable to its own operations and environment, as opposed to market-wide risk.
Risk-free Asset
An investment with a guaranteed return and no risk of financial loss, often exemplified by government bonds.
Adequately Diversified
A portfolio strategy minimizing risk by investing in a wide variety of assets, ensuring that the performance of one investment does not dramatically impact overall portfolio performance.
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