An unsystematic risk which can be eliminated but market risk is the

April 16, 2024 by rawan239

is the risk that remains after diversification, which is the unsystematic risk. The effective risk is the risk that is actually faced by investors, which is the sum of the systematic risk and the unsystematic risk. The ineffective risk is the risk that is not actually faced by investors, which is the unsystematic risk.

Here is a more detailed explanation of each option:

• Aggregate risk is the total risk of a portfolio, which is the sum of the systematic risk and the unsystematic risk. Systematic risk is the risk that cannot be diversified away, and unsystematic risk is the risk that can be diversified away.
• Remaining risk is the risk that remains after diversification, which is the unsystematic risk.
• Effective risk is the risk that is actually faced by investors, which is the sum of the systematic risk and the unsystematic risk.
• Ineffective risk is the risk that is not actually faced by investors, which is the unsystematic risk.