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Basic Question 4 of 8
Which of the following is equivalent to total risk?
B. Market risk plus firm-specific risk
C. Market risk plus non-diversifiable risk
D. Firm-specific risk plus diversifiable risk
E. Systematic risk minus unsystematic risk
A. Diversifiable risk plus unsystematic risk
B. Market risk plus firm-specific risk
C. Market risk plus non-diversifiable risk
D. Firm-specific risk plus diversifiable risk
E. Systematic risk minus unsystematic risk
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan | D; firm-specific risk is diversifiable risk |
| danlan2 | diversifiable=unsystematic=firm specific non diversifiable=systematic=market |
| EEEEvia | since diversifiable risk is equal to unsystematic risk, so why not A? |
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Learning Outcome Statements
explain systematic and nonsystematic risk, including why an investor should not expect to receive additional return for bearing nonsystematic risk
CFA® 2025 Level I Curriculum, Volume 2, Module 2.