Why Would a Stock Market Investor Not Be Concerned with Unique

question 24

Multiple Choice

Why would a stock market investor not be concerned with unique risks when calculating expected rates of return?

• A)There is no method to quantify unique risks.
• B)Unique risks are assumed to be diversified away.
• C)Unique risks are compensated by the risk-free rate.
• D)Beta includes a component to compensate unique risk.

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Definitions:

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An educational approach where computers are used to deliver, support, or enhance teaching and learning activities.

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