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Fixed Income

Diversifiable Risk

Diversification is a crucial strategy in managing risk in finance. When an asset is combined with others in a well-diversified portfolio, certain risks can be eliminated. Such risks, known as unsystematic risks, are specific to individual assets and can be mitigated by spreading investments across different assets. This reduces the overall risk of the portfolio, making it less vulnerable to market fluctuations. Therefore, diversification is essential for a well-rounded and secure investment portfolio.

Related terms

Repo Rate

Understand the meaning and definition of Repo Rate in the context of stock market, trading, and investments.

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Liquidity

Understand the meaning and definition of Liquidity in the context of stock market, trading, and investments.

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Prospectus

Understand the meaning and definition of Prospectus in the context of stock market, trading, and investments.

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T-Bill (Treasury Bill)

Understand the meaning and definition of T-Bill (Treasury Bill) in the context of stock market, trading, and investments.

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Eurodollar Market

Understand the meaning and definition of Eurodollar Market in the context of stock market, trading, and investments.

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Underpricing

Understand the meaning and definition of Underpricing in the context of stock market, trading, and investments.

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