Unsystematic Risk
How many stocks are generally needed to eliminate most unsystematic risk?
Research shows that 20-30 properly diversified stocks (across different sectors) can eliminate most unsystematic risk from a portfolio. Beyond this number, additional diversification provides diminishing benefits.
Complete Analysis & Legal Rationale
Research shows that 20-30 properly diversified stocks (across different sectors) can eliminate most unsystematic risk from a portfolio. Beyond this number, additional diversification provides diminishing benefits.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.