Question

Tracie owns only one stock. When she evaluates the risk in her portfolio she should focus...

Tracie owns only one stock. When she evaluates the risk in her portfolio she should focus on:

Multiple Choice

  • Unsystematic risk
  • Systematic risk
  • Economic risk
  • Total risk
  • Non diversifiable risk
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Answer #1

Option A is correct. Unsystematic Risk

Unsystematic risk is the risk that is inherent in a specific company or industry. So if only one security has to be selected it has to be selected keeping in the risk related to that industry or to that particular company. So, if one stock is to be selected, focus should be on the Unsystematic Risk.

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