I keep getting this question wrong because I feel like two answers are correct.
Which of the following statements about systematic and unsystematic risk is most accurate?
A. As an investor increases the number of stocks in a portfolio, the systematic risk will remain constant.
B. The unsystematic risk for a specific firm is similar to the unsystematic risk for other firms in the same industry
C. Total risk equals market risk plus firm-specific risk.
I know C is correct, but I thought A was also correct. Does systematic risk change? I thought it was a constant risk that was undiversifiable.
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