Securities with large unsystematic risks
A) must have large expected returns.
B) will also have large systematic risks.
C) do not necessarily have large expected returns.
D) will have large Betas.

Question

Quizplus · Accepted Answer

Large unsystematic risks can occur due to specific factors such as company management, industry competition, legal issues, etc. Therefore, it does not necessarily mean that securities with large unsystematic risks will have large expected returns. The expected return depends on various factors and is not solely determined by unsystematic risk.

Securities with Large Unsystematic Risks