Which of the following is the best measure of the systematic risk in a portfolio?
A) Variance
B) Standard deviation
C) Covariance
D) Beta

Question

Quizplus · Accepted Answer

Beta is a measure of the systematic risk of a portfolio or a stock, which measures the extent to which the returns of the portfolio or stock move in response to the market or benchmark. Therefore, beta is the most appropriate measure of systematic risk and is commonly used in portfolio analysis and asset pricing models. Variance, standard deviation, and covariance are measures of total risk, which include both systematic risk and unsystematic risk.

Which of the Following Is the Best Measure of the Systematic