CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

_______ risk can be diversified away.

A. Systematic
B. Unsystematic
C. Total
Correct Answer: B

Systematic Risk: Risk inherent in an investment, related to movements in the market that cannot be diversified away.
Unsystematic Risk: Risk of an investment that is random in nature. It is not related to general market movements. It may represent the temporary influence of a competitor's new product, changes in raw material prices, or unusual economic or government influences on a firm. It may generally be diversified away.

User Contributed Comments 0

You need to log in first to add your comment.