Final answer:
An investor can eliminate virtually all unsystematic risk by holding a well-diversified portfolio of stocks.
Step-by-step explanation:
True. An investor can eliminate virtually all unsystematic risk by holding a very large and well-diversified portfolio of stocks.
Unsystematic risk refers to the risk that is unique to a specific company or industry and can be reduced by spreading investments across different stocks from various industries and sectors.
By diversifying, the investor can minimize the impact of negative events on any single company and protect their portfolio from significant losses.