Question

Diversification can reduce or eliminate _______ risk.

A) All
B) Systematic
C) Idiosyncratic
D) Market

Answer 1

B

Step-by-step explanation:

Diversification reduces portfolio risk by eliminating unsystematic risk for which investors are not rewarded. Investors are rewarded for taking market risk. Because diversification averages the returns of the assets within the portfolio, it attenuates the potential highs and lows

Answer 2

D eliminate Market risk