Question

Which of the following are non diversifiable risk?

1. business risk
2. management risk
3. company or industry risk
4. Market risk
5. interest rate risk
6. purchasing power risk


A. 4, 5, and 6
B. 1, 2, and 3
C. 5, 6, and 2
D. 1, 3, and 4
E. 1, 4, and 6

Answer 1

Non-diversifiable risk, also known as systematic risk, refers to risks that affect the entire market or economy and cannot be eliminated through diversification.

Step-by-step explanation:

Non-diversifiable risk, also known as systematic risk, refers to risks that affect the entire market or economy and cannot be eliminated through diversification. They are factors beyond an individual's control and can affect all investments. Based on the options given, the non-diversifiable risks are market risk (option 4), interest rate risk (option 5), and purchasing power risk (option 6).