In the capital asset pricing model, the beta coefficient is a measure of ________.
A) unsystematic risk
B) non-aggregate risk
C) business-specific risk
D) nondiversifiable risk

Question

Quizplus · Accepted Answer

The beta coefficient in the capital asset pricing model is a measure of nondiversifiable or systematic risk, which is the risk that cannot be eliminated through diversification. It measures the sensitivity of an asset's returns to market-wide movements.

In the Capital Asset Pricing Model, the Beta Coefficient Is