In most cases, diversification can reduce or eliminate this type of risk. A. systematic risk. B....

In most cases, diversification can reduce or eliminate this type of risk.

A. systematic risk.
B. nonsystematic.
C. macro risk
D. all risk.

Solutions

Expert Solution

Diversification is a process of eliminating risk by investing in various categories of industries. Diversification help in reducing risk and also helps in generating good amount of returns. Risk can be of Systematic risk or non systematic.Systematic risk is non diversifiable and hence it is also called as market risk whereas nonsystematic risk is industry specific so that is diversifiable.

Answer: nonsystematic risk (B)

jeff jeffy answered 2 years ago

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