Series 79: Nonsystematic Risk

Taken from our FINRA Investment Banking Exam

Definition of the term Nonsystematic Risk...

one of the two broadest categories of investment risk, the other being systematic risk. Nonsystematic risks are risks that affect particular investments, as opposed to systematic risks, which affect entire financial markets. Portfolios that aren't sufficiently diversified open themselves up to nonsystematic risk. Also called unsystematic risk.

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