Systematic Risk Is Rewarded with Higher Returns in the Market

question 43

Multiple Choice

Systematic risk is rewarded with higher returns in the market because:

• A) it is associated with market movements which cannot be eliminated through diversification
• B) it is a microeconomic risk
• C) that risk is unique to a firm or an industry
• D) initial capital outlays are higher to purchase the investment

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Definitions:

Independence

Independence signifies the state or quality of being self-reliant and not subject to outside control, often used in the context of countries, organizations, or individuals.

Connected Car

A car that is equipped with internet connectivity, allowing it to access, send, and receive data, enhancing the driving experience with features like navigation and diagnostics.

GB (Gigabytes)

A unit of digital information storage that equals approximately 1 billion bytes or 1,024 megabytes, commonly used to quantify file sizes or storage capacity.

Data Rot

The gradual degradation of computer data storage or the phenomenon where digital data becomes inaccessible over time due to media decay or technological obsolescence.