SIE Exam Question 611: Answer and Explanation

Question: 611

The S&P index has __________ risk.

• A. non-systematic
• B. non-diversifiable
• C. diversifiable
• D. unsystematic

Correct Answer: B

Explanation:

The S&P index has systematic risk only. Systematic risk is also referred to as non-diversifiable risk. The other answers (non-systematic risk, diversifiable risk, and unsystematic risk) all refer to the same type of risk.