Question
Which type of risk is unaffected by adding securities to a portfolio?
Multiple choice question.
Both systematic and unsystematic risk
Systematic risk
Neither systematic nor unsystematic risk
Unsystematic risk
Multiple choice question.
Both systematic and unsystematic risk
Systematic risk
Neither systematic nor unsystematic risk
Unsystematic risk
Answers
GPT-4o mini
The correct answer is **Systematic risk**.
Systematic risk, also known as market risk, is inherent to the entire market or a specific segment and cannot be eliminated through diversification by adding more securities to a portfolio. Unsystematic risk, on the other hand, can be reduced through diversification.
Systematic risk, also known as market risk, is inherent to the entire market or a specific segment and cannot be eliminated through diversification by adding more securities to a portfolio. Unsystematic risk, on the other hand, can be reduced through diversification.