What Type of Risk Could Be Reduced by Portfolio Diversification

question 17

Multiple Choice

What type of risk could be reduced by Portfolio diversification?

• A) Idiosyncratic risk and systemic risk
• B) Just systemic risk
• C) Just idiosyncratic risk
• D) Neither types

---

Definitions:

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community.

Organizational Strategy

A plan of action designed to achieve a long-term or overall aim within an organization, reflecting its mission, vision, and overarching goals.

Human Capital

Represents the economic value that an employee's skill set and knowledge brings to an organization.

High Demand

A situation where the need or desire for a product, service, or skill exceeds the supply or availability at the current price, often leading to increased prices or shortages.