Asked by

Ankit Karody
on Oct 20, 2024

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Approximately how many securities does it take to diversify almost all of the unique risk from a portfolio?

A) 2
B) 6
C) 8
D) 20

Unique Risk

Also known as unsystematic or idiosyncratic risk, it refers to the risk associated with a particular company or industry that can be mitigated through diversification.

Securities

Financial vehicles denoting an ownership interest in corporations available on public exchanges, debt obligations held against governmental entities or businesses through bonds, or potential ownership through options trading.

Diversify

Diversify refers to the strategy of spreading investments across various financial instruments, industries, and other categories to reduce exposure to risk.

  • Familiarize yourself with the principles of diversification and examine its effects on managing risk in portfolios.
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Milou VennemaOct 20, 2024
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