None Diversification can reduceA. systematic risk onlyB. unsystematic risk onlyC. both systematic andunsystematic D. Market risk

Reason:In context of finance, stocks or any other risky financial asset all have total risk which is…

Answered: Diversification can reduce A.…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter11: Risk-adjusted Expected Rates Of Return And The Dividends Valuation Approach

Section: Chapter Questions

Problem 5QE

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Similar questions

The risk associated with the overall market is referred to as _____ risk. a. unsystematic b. diversified c. portfolio d. systematic
Market risk ________. a. is equal to the rate of return generated by a risk-free asset b. cannot be eliminated, as it is non-diversifiable c. is synonymous with diversifiable risk d. is synonymous with financial risk
The systematic risk principle states that the expected return on a risky asset depends only on which one of the following? Unsystematic risk Market risk Diversifiable risk
CAPM accounts for a. Unsystematic risk b. Systematic risk c. Both Systematic and Unsystematic risk d. Unique risk
What type of risk is the risk that belongs to the market as a whole? Systematic risk Unsystematic risk (or nonsystematic risk) Total risk
Problem about fina
What does Jensen's alpha measure? a. An investor's reward in proportion to their assumption of systematic risk b. The abnormal return of an asset, defined as the degree to which its actual return exceeds that predicted by the capital asset pricing model c. The degree to which diversifiable risk is eliminated d. How much reward an investor is getting for each unit of risk assumed
MC question attached
The value-at-risk is the most commonly used measure of market risk. a. Write a Short History of Value-at-Risk b. Explain the methods used to determine Value-at-Risk
Derivatives are used in risk management because they _____.a. diversify risksb. hedge risksc. avoid risksd. none of the above
Which of the following types of risk is NOT reduced by portfolio diversification? Multiple choice question. Unsystematic risk Unique risk Systematic risk Neither systematic risk nor unsystematic risk is reduced
Market risk is portion of a security's stand-alone risk that cannot be eliminated through diversification. True False

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Diversification can reduce A. systematic risk only B. unsystematic risk only C. both systematic and unsystematic D. Market risk