It is often said that you can reduce your investment risk by creating a portfoli

Question

It is often said that you can reduce your investment risk by creating a portfolio of stocks rather than investing in a single stock. This concept is referred to as diversification.  Diversification significantly reduces some component of the total risk (also referred to as diversifiable risk) What is the name of the basic risk that we can reduce through diversification?

It is often said that you can reduce your investment risk by creating a portfolio of stocks rather than investing in a single stock. This concept is referred to as diversification. Diversification significantly reduces some component of the total risk (also referred to as diversifiable risk) What is the name of the basic risk that we can reduce through diversification?

Explanation / Answer

idiosyncratic risks

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