Multiple Choice
Which of the following statements about market risk and firm-specific risk is true?
A) Market risk is an unsystematic risk, whereas firm-specific risk is systematic risk.
B) Market risk is not rewarded with additional returns, whereas firm-specific risk is rewarded with additional returns.
C) Market risk is a diversifiable risk, whereas firm-specific risk is a nondiversifiable risk.
D) Market risk is a relevant risk, whereas firm-specific risk is an irrelevant risk.
E) Market risk includes default risk, whereas firm-specific risk includes maturity risk.
Correct Answer:
Verified
Correct Answer:
Verified
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