In the context of the capital asset pricing model,the systematic measure of risk is captured by _________.
A) unique risk
B) beta
C) standard deviation of returns
D) variance of returns

Question

Quizplus · Accepted Answer

The systematic measure of risk is captured by beta, which measures an asset's sensitivity to changes in the overall market. Unique or idiosyncratic risk, on the other hand, refers to risk that is specific to a particular company or asset and can be diversified away. Standard deviation and variance of returns are measures of total risk, which includes both systematic and unique risk.

In the Context of the Capital Asset Pricing Model,the Systematic