What does diversified risk mean?
What is Diversifiable Risk? Diversifiable risk is the possibility that there will be a change in the price of a security because of the specific characteristics of that security. Diversification of an investor's portfolio can be used to offset and therefore eliminate this type of risk.
What is Diversifiable risk and Nondiversifiable risk?
In this framework, the diversifiable risk is the risk that can be washed out by diversification and the nondiversifiable risk is the risk which cannot be diversified away. It appears to us that the decomposition of risk into its components is in some cases vague and in most cases imprecise.
What does Diversifiable mean?
diversifiable (comparative more diversifiable, superlative most diversifiable) Capable of being diversified or varied.
What is undiversified risk?
Systematic risk refers to the risk inherent to the entire market or market segment. Systematic risk, also known as undiversifiable risk, volatility or market risk, affects the overall market, not just a particular stock or industry.
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