Question
Which type of risk does not change as we add more securities to a portfolio?
Multiple choice question.
Company-specific risk
Unsystematic, or diversifiable, risk
Systematic, or market, risk
Idiosyncratic risk
Multiple choice question.
Company-specific risk
Unsystematic, or diversifiable, risk
Systematic, or market, risk
Idiosyncratic risk
Answers
GPT-4o mini
The type of risk that does not change as we add more securities to a portfolio is:
**Systematic, or market, risk.**
Systematic risk affects the entire market and cannot be eliminated through diversification, while company-specific risk (unsystematic risk) can be reduced by adding more securities to the portfolio.
**Systematic, or market, risk.**
Systematic risk affects the entire market and cannot be eliminated through diversification, while company-specific risk (unsystematic risk) can be reduced by adding more securities to the portfolio.