Unsystematic risk: Multiple Choice -is measured by beta. -can be effectively eliminated through portfolio diversification. -cannot...

Unsystematic risk:

Multiple Choice

-is measured by beta.
-can be effectively eliminated through portfolio diversification.
-cannot be avoided if you wish to participate in the financial markets.
-is compensated for by the risk premium.
-is related to the overall economy

Expert Solution

Unsystematic risk which is also called the firm specific risk is the risk for which investors are not compensated as it can be eliminated for free by diversification.

Therefore, the answer is option b.

In case of any query, kindly comment on the solution

jeff jeffy answered 2 years ago

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