CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

The portion of risk that can be eliminated by diversification is called ______.

A. unique risk
B. market risk
C. default risk
Correct Answer: A

User Contributed Comments 11

User Comment
mtcfa Shouldn't the answer be B?
danlan Market risk is always there, unique risk can be eliminated.
Rotigga Unique risk is the risk related to a specific asset.
ljamieson Unique risk <=> Asset specific risk I assume
Crown01 Unique risk = unsystematic risk also.
Crown01 or we can can call unique risk as diversifiable risk
BigJimStud think of it this way, how can you ever diversify away market risk when by the very nature of investing you are in the market to begin with?
thekobe market risk= systematic risk
unique risk = unsystematic risk
gulfa99 unsystematic risk = unique risk
systematic risk = non unique risk
refer to notes
davcer market=systematic=non unique=nos diversifiable
maryprz14 You can't diversify away the system risk because by investing in the market, you are in the system.

haha... sounds like a serious boring quote :D
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