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AnnZ [28]
4 years ago
15

Portfolio diversification eliminates: Multiple Choice all investment risk. the portfolio risk premium. market risk. unsystematic

risk. the reward for bearing risk.
Business
1 answer:
kaheart [24]4 years ago
7 0

Answer:

Unsystematic risk

Explanation:

<em>The portfolio theory posits that the total risk on a collection of assets (i,e a portfolio) can be reduced by spreading the invested fund into different assets that are uncorrelated.</em>

<em>According to this model, the total risk on a portfolio is divided into systematic and unsystematic risks. The theory assumed by diversification, the unsystematic risk associated with a portfolio is eliminated.</em>

Unsystematic risk essentially are those unique individual assets for example. if we invest in company stock, risk associated with factors like bad management , law suit against a company, defect in company;s products are example of unique or systematic risks

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