Which One of the Following Statements Is Correct Concerning Unsystematic

question 13

Multiple Choice

Which one of the following statements is correct concerning unsystematic risk?

• A) An investor is rewarded for assuming unsystematic risk.
• B) Eliminating unsystematic risk is the responsibility of the individual investor.
• C) Unsystematic risk is rewarded when it exceeds the market level of unsystematic risk.
• D) Beta measures the level of unsystematic risk inherent in an individual security.
• E) Standard deviation is a measure of unsystematic risk.

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Definitions:

Semiannually Compounded

Interest calculation method where the interest earned is added to the principal twice per year, effectively growing the investment more quickly than simple interest.

Compound Annual

A calculation of the total compound interest earned or payable over a period of one year.

Hourly Wage

The amount of money paid for each hour of work, commonly used in part-time and some full-time employment.

Semiannual Compounding

A method of calculating interest where the capital is compounded twice a year.