Through Diversification It Is Possible to Eliminate All of the Company-Specific

question 132

True/False

Through diversification it is possible to eliminate all of the company-specific risk inherent in owning stocks.However,as a general rule it will not be possible to eliminate systematic (market)risk.

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Definitions:

Legal Liability

The legal responsibility one party has for the consequences of their actions or omissions, which may result in harm or loss to another party and require compensation.

Inadequate Research

A situation where the level of investigation or study into a subject is insufficient to meet the required standards or objectives.

Duty of Competence

The obligation for professionals, especially in legal and medical fields, to maintain a reasonable level of skill and knowledge while serving their clients or patients.

Nonlawyer Employees

Staff members working within a law firm or legal environment who do not possess a law degree or legal license but support legal services.