The systematic risk principle implies that the _____ an asset depends only on that asset's systematic risk.
A) variance of the returns on
B) standard deviation of the returns on
C) expected return on
D) total risk assumed by owning
E) diversification benefits of

Question

Quizplus · Accepted Answer

The systematic risk principle states that the expected return on an asset depends only on that asset's systematic risk, not on its total or unsystematic risk, because systematic risk cannot be diversified away.

The Systematic Risk Principle Implies That the _____ an Asset