Five years ago, Shannon decided to start investing monthly in the comm

Five years ago, Shannon decided to start investing monthly in the common stock of ABC Telecom Company. Her financial well-being will be harmed if the price of ABC Telecom stock drops significantly.

The risk of investment loss can be reduced if she invests in other companies and other types of financial assets. The risk Shannon faces with regard to her investments is a(n)
A) enterprise risk.
B) diversifiable risk.
C) pure risk.
D) nondiversifiable risk.

ANSWER

Answer: B