Systematic risk is measured by
A)beta.
B)the arithmetic average.
C)the geometric average.
D)covariance.
E)standard deviation.

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, is measured by beta. Beta measures the sensitivity of a stock's returns to overall market movements. A beta of 1 indicates that the stock's returns move in line with the market, while a beta greater than 1 indicates that the stock is more volatile than the market and a beta less than 1 indicates that the stock is less volatile than the market.

Systematic Risk Is Measured by