Question: The major difference between firm - specific credit risk and systematic credit risk is that: FI s can diversify systematic credit risk, while firm -

The major difference between firm-specific credit risk and systematic credit risk is that:
FI s can diversify systematic credit risk, while firm-specific credit risk cannot be diversified.
FI s can diversify firm-specific credit risk, while systematic credit risk cannot be diversified.
None of the listed options are correct, as FI s can diversify both types of credit risk.
None of the listed options are correct, as FI s cannot diversify either type of credit risk.

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