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In a well-diversified portfolio:A. market risk is negligible.B. systematic risk is negligible.C. non-systematic or idiosyncratic risk is negligibleD. non-diversifiable risk is negligible.E. all risks have been diversified away

User Daxsorbito
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The correct answer is C. Non-systematic or idiosyncratic risk is negligible. A well-diversified portfolio reduces the idiosyncratic or non-systematic risks associated with individual securities, but systematic risks, such as market or interest rate risk, cannot be diversified away.
User Abhishek Ringsia
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