The unexpected return on a security,U,is made up of:
A) market risk and systematic risk.
B) systematic risk and unsystematic risk.
C) idiosyncratic risk and unsystematic risk.
D) expected return and market risk.
E) expected return and idiosyncratic risk.

Question

Quizplus · Accepted Answer

The unexpected return on a security is composed of systematic risk, which affects the entire market, and unsystematic risk, which is unique to a particular company. Therefore, the answer is B.

The Unexpected Return on a Security,U,is Made Up Of