Question: Total risk includes systematic risk and unsystematic risk. Unsystematic risk includes business and financial risk due to decision made by the company regarding operations and

Total risk includes systematic risk and unsystematic risk. Unsystematic risk includes business and financial risk due to decision made by the company regarding operations and financing of assets. Systematic risk includes market risk, inflation risk, reinvestment rate risk, etc. These are risks faced by all companies and their stockholders. If you have a well diversified portfolio, which is the only relevant risk, and why is only this risk relevant?

a. Unsystematic risk, because it can't be diversified away

b. Systematic risk, because it can be diversified away

c. Systematic risk, because it can't be diversified away.

d. Unsystematic risk, because it can be diversified away

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