Asked by
Francisco Azevedo
on Nov 07, 2024
Verified
The risk premium increases as the non-diversifiable risk increases.
Risk Premium
The additional return an investor demands for taking on a higher risk compared to a risk-free investment.
Non-diversifiable Risk
The part of an investment's risk that cannot be eliminated through diversification, pertaining to wider market or economic factors.
- Acknowledge how assorted risk types influence asset valuations and profits.
Verified Answer
PS
Learning Objectives
- Acknowledge how assorted risk types influence asset valuations and profits.