SIE practice questionhardMarket risk
Which risk remains even when a portfolio is well-diversified across sectors and asset classes?
- AConcentration risk
- BCredit risk
- CMarket risk✓ Correct answer
- DBusiness risk
Explanation
Why C — Market risk
Market risk (systematic risk) cannot be diversified away; all assets are affected by market-wide events. The other risks can be minimized through diversification.
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