Which of the Following Is the Best Definition of Unsystematic

question 279

Multiple Choice

Which of the following is the best definition of unsystematic risk

• A) A theory showing that the expected return on any risky asset is a linear combination of various factors.
• B) A risk that affects at most a small number of assets. Also called unique or asset-specific risks.
• C) A risk that influences a large number of assets. Also called market risk.
• D) Positively sloped straight line displaying the relationship between expected return and beta.
• E) Principle stating that spreading an investment across a number of assets eliminates some, but not all, of the risk.

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Definitions:

Return on Total Assets

Return on Total Assets (ROTA) is a financial ratio that measures a company's net income relative to its total assets, indicating how efficiently the company is using its assets to generate profit.

Company Information

Pertains to data and facts about a company, including its operations, financial condition, industry sector, and management strategies.

Current Year

The ongoing calendar year or fiscal year in which a company or individual is reporting or analyzing financial information.