Define unsystematic risk.
Understand the Problem
The question is asking for a definition of unsystematic risk, which refers to the risk associated with a specific company or industry that can be mitigated through diversification. It involves risks that are unique to a particular asset or investment.
Answer
Risks specific to a company or industry, reducible through diversification.
Unsystematic risk refers to risks that are specific to an individual company or industry and can be mitigated through diversification.
Answer for screen readers
Unsystematic risk refers to risks that are specific to an individual company or industry and can be mitigated through diversification.
More Information
Unsystematic risk, also known as specific risk, diversifiable risk, or idiosyncratic risk, arises from factors that affect a particular company or industry. Investors can mitigate this risk by diversifying their portfolios across different companies and industries.
Sources
- What Is Unsystematic Risk? Types and Measurements Explained - investopedia.com
- Unsystematic Risk | Definition + Examples - Wall Street Prep - wallstreetprep.com
- Unsystematic risk Definition - Nasdaq - nasdaq.com
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