Ms Brown is reviewing her investment portfolio of
Australian shares with her advisor. Which of the following statements best
explains why investors are typically not compensated for taking on unsystematic
risk?

Question

Answer

Unsystematic risk is difficult to measure, so markets
tend to ignore it in pricing.

Answer

Unsystematic risk is driven by macroeconomic events,
which affect all assets equally.

Answer

Unsystematic risk only applies to property and fixed
income investments, not shares.

Answer

Unsystematic risk can be reduced through
diversification, so investors are not compensated for bearing it.

Crowdly

Ms Brown is reviewing her investment portfolio of Australian shares with her adv...

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