Russell holds stocks in four companies. If he adds stocks of several more companies he will decrease

A) firm-specific risk but not market risk.
B) firm-specific risk and market risk.
C) market risk but not firm-specific risk.
D) neither firm-specific nor market risk.

Firm-Specific Risk

Firm-specific risk refers to the risk associated with events or factors that are unique to a particular company, which can affect its stock price.

Market Risk

The risk of losses in financial markets arising from movements in market prices.

Stocks

Financial securities representing partial ownership in a company, allowing investors to claim on the company's assets and earnings.