Question 1
________ risk ________ be eliminated through greater diversification and is due to firm-specific or industry-wide factors such as strikes or resource price changes.
◦ Systematic; can
◦ Systematic; cannot
◦ Unsystematic; can
◦ Unsystematic; cannot
◦ None of these
Question 2
________ risk affects all stocks to a greater or lesser extent and is due to large macroeconomic shocks. This type of risk ________ be eliminated through diversification.
◦ Systematic; can
◦ Systematic; cannot
◦ Unsystematic; can
◦ Unsystematic; cannot
◦ None of these