The risk premium of a stock is not affected by its
a) undiversifiable risk
b) typical risk
c) systematic risk
d) unsystematic risk

correct option is D) unsystematic risk

Explanation:

solution

risk premium of a stock is not affected by unsystematic risk because unsystematic risk affects single company or the even entire industry but it is not present in other industries and it is also danger when it relates to particular security but risk premium of a stock is not effected by it

only systematic risk that affects the risk premium

Unsystematic risk is also known as diversifiable risk or non systematic risk

so here correct option is D) unsystematic risk

ok

Explanation: