QuestionJuly 20, 2025

What are the benefits of a well -diversified portfolio? It protects you from company-unique risk. It protects you from firm specific risk. All of these are correct. All but It protects you from systematic risk are correct. It protects you from systematic risk.

What are the benefits of a well -diversified portfolio? It protects you from company-unique risk. It protects you from firm specific risk. All of these are correct. All but It protects you from systematic risk are correct. It protects you from systematic risk.
What are the benefits of a well -diversified portfolio?
It protects you from company-unique risk.
It protects you from firm specific risk.
All of these are correct.
All but It protects you from systematic risk are correct.
It protects you from systematic risk.

Solution
4.6(164 votes)

Answer

All but It protects you from systematic risk are correct. Explanation 1. Identify the types of risks A well-diversified portfolio primarily protects against company-unique risk and firm-specific risk, which are essentially the same. It does not protect against systematic risk, which affects the entire market. 2. Evaluate the options "All but It protects you from systematic risk are correct" is accurate because diversification mitigates specific risks but not systematic risk.

Explanation

1. Identify the types of risks<br /> A well-diversified portfolio primarily protects against company-unique risk and firm-specific risk, which are essentially the same. It does not protect against systematic risk, which affects the entire market.<br /><br />2. Evaluate the options<br /> "All but It protects you from systematic risk are correct" is accurate because diversification mitigates specific risks but not systematic risk.
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