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Company specific risk is also known as

This question belongs to Commerce Financial Management
Financial Management
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Company specific risk is also known as ________.

Answer & Solution
Correct Answer: Option D
Idiosyncratic risk, also known as unsystematic risk or residual risk or diversifiable risk, is risk that is not correlated to overall market risk – it is the risk of price change caused by the unique circumstances of a particular security, or the risk that is sector-specific or company-specific.
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2 Comments
Raouf Luck
Raouf Luck 6 years ago
Company specific risk is also known as diversifiable risk. Company risk is the financial uncertainty faced by an investor who holds securities in a specific firm.
Laxman Agarwal
Laxman Agarwal 6 years ago
Idiosyncratic risk is a type of investment risk that is endemic to an individual asset (like a particular company's stock), or a group of assets (like a particular sector's stocks), or in some cases, a very specific asset class (like collateralized mortgage obligations). Answer should be D.
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