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What Is the Difference Between Systematic and Nonsystematic Risk

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What is the difference between systematic and nonsystematic risk?


Definitions:

Sharpe Measure

A method to calculate risk-adjusted return, comparing the return of an investment to its risk.

Standard Deviation

A statistical measure that indicates the extent of deviation or dispersion of a set of values from their mean.

Beta

A measure of a stock's volatility in relation to the overall market.

Sharpe Measure

A formula used to calculate the adjusted return of an investment by considering its risk, allowing for comparison against risk-free assets.

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