Beta is a measure of:
A)Total risk.
B)Diversifiable risk.
C)Systematic risk.
D)Unsystematic risk.

Question

Quizplus · Accepted Answer

Beta is a measure of systematic risk, which is the risk that is inherent in the entire market or market segment and cannot be diversified away. It is not a measure of total risk (which includes both systematic and unsystematic risk) or diversifiable risk (which is the risk that can be diversified away by investing in a portfolio of assets).

Beta Is a Measure Of