189k views
4 votes
What is another name for unsystematic risk?

A) Market risk
B) Beta risk
C) Diversifiable risk
D) Systematic risk

1 Answer

4 votes

Final answer:

Another name for unsystematic risk is C) Diversifiable risk. It is specific to a company or industry and can be reduced by holding a diverse portfolio of assets, unlike systemic risk which is inherent to the market.

Step-by-step explanation:

The other name for unsystematic risk is C) Diversifiable risk. Unsystematic risk is specific to a company or industry and can be reduced through diversification, which is why it's also known as diversifiable risk. Unlike systematic risk, which affects the entire market and is non-diversifiable, unsystematic risk can be mitigated by holding a diversified portfolio of assets.

Market risk, beta risk, and systematic risk are terms used to describe risks that impact a broad range of assets in the market and cannot be easily mitigated through diversification. Therefore, options A, B, and D are not the correct terms for unsystematic risk.

User Shenglin Chen
by
7.6k points