What Type of Risk Can Investors Reduce Through Diversification

question 64

Multiple Choice

What type of risk can investors reduce through diversification?

• A) All risk
• B) Systematic risk only
• C) Unsystematic risk only
• D) Uncertainty

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Definitions:

Gratuitous Assignment

An assignment or transfer of rights or property done voluntarily without receiving any value in return.

Irrevocable

Incapable of being taken back, undone, or cancelled, often used in the context of certain contracts, trusts, or offers.

Implied Warranties

Legal guarantees that are not explicitly stated but are assumed in transactions, indicating that a product will meet certain quality and reliability standards.

Assignor

The party in a contract who transfers their rights or interests in a property or contract to another party, known as the assignee.