Of the following which differs from the other three?
a) Systematic Risk
b) Market Risk
c) Asset unique Risk
d) Undiversifiable Risk
Risk mitigation refers to the process that the firm uses to address risks that are associated with risks that are associated with an investment. Risk mitigation measures include:
- Risk transferring.
- Risk avoidance.
Answer and Explanation:
the answer is (c) Asset unique Risk
Asset unique risk differs from the other three because all the others are systematic risks.Market risk, systematic risk and ubdiversified risks are risks that affect the entire industry. Asset unique risk refers to the risk tha affcets a certain asset but not the entire industry therefore this is the odd one out.
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Learn more about this topic:
from Finance 305: Risk ManagementChapter 3 / Lesson 3