Chapter 01 · Section 1.1

The risk of a stock portfolio

The risk of a stock portfolio consists in market risk on the one hand and specific risk on the other. Specific risk is...

b) the risk inherent to an individual stock
Yes. The risk inherent to an individual stock is called specific risk. The risk inherent to a stock portfolio may be reduced by diversification. However, it cannot be reduced below the systematic risk of the market. Continue