To critically think about: The risk eliminated through diversification. Introduction: Risk refers to the movement or fluctuation in the value of an investment. The movement can be positive or negative. A positive fluctuation in the price benefits the investor. The investor will lose money if the price movement in negative. Systematic risk refers to the market-specific risk that impacts the economy as a whole. Unsystematic risk refers to the asset-specific risk that impacts only a particular asset or a small group of assets.

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Chapter 13, Problem 13.5CTF

Summary Introduction

To critically think about: The risk eliminated through diversification.

Introduction:

Risk refers to the movement or fluctuation in the value of an investment. The movement can be positive or negative. A positive fluctuation in the price benefits the investor. The investor will lose money if the price movement in negative.

Systematic risk refers to the market-specific risk that impacts the economy as a whole. Unsystematic risk refers to the asset-specific risk that impacts only a particular asset or a small group of assets.

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