A share's beta is a measure of its
A)systematic risk.
B)unsystematic risk.
C)company-specific risk.
D)diversifiable risk.

Question

Quizplus · Accepted Answer

A share's beta measures its systematic risk, which is the risk inherent to the entire market or a particular market segment. Beta is used to determine how much an individual stock's price is expected to move in relation to changes in the broader market. Beta is not a measure of unsystematic or diversifiable risks, which are unique to individual companies and can be mitigated through diversification.

A Share's Beta Is a Measure of Its