Unsystematic Risk

question 46

Multiple Choice

Unsystematic risk:

• A) is the remaining risk in a well-diversified portfolio.
• B) is measured with beta.
• C) can be diversified away.
• D) all of the above

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Reliability

Refers to the consistency and stability of a measure or test over time.

Validity

The extent to which a test, scale, or measuring instrument accurately measures what it is intended to measure.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related measure.