The total risk of any investment, (i.e., a stock, a bond or any other investment asset) can be divided into two risk components: "diversifiable risk" and "Nondiversifiable risk". Diversifiable risk or firm-specific risk is not of concern to informed investors as the investor can reduce or even eliminate this risk by investing in a diversified portfolio of investments. For example, investing in a mutual fund or ETF (exchange traded fund) with exposure to the companies included in the S&P 500 index (rather than investing in a single company, like Amazon). Nondiversifiable risk or market risk is what investors are compensated for when they make an investment in a diversified portfolio of stocks. O True False