Unsystematic Risk Cannot Be Eliminated Through Diversification

question 38

True/False

Unsystematic risk cannot be eliminated through diversification.

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Definitions:

Initial Investment

The initial amount of money spent to start a project, purchase assets, or acquire a stake in a business venture.

Net Operating Income

A financial metric that calculates the profitability of a business's core operations, excluding the costs and returns of financial activities and one-time events.

Scrap Value

The estimated resale value of an asset at the end of its useful life, which is considered during the depreciation calculation of that asset.

Required Rate of Return

The minimum rate of return on an investment deemed acceptable by an investor, considering the investment's risk.