Systematic Risk Is Important Because

question 52

Multiple Choice

Systematic risk is important because:

• A) the expected return of an asset depends on its systematic risk.
• B) systematic risk is essentially eliminated in a portfolio.
• C) measuring systematic risk allows us to price stocks.
• D) systematic risk allows for risk to be diversified away.
• E) systematic risk is linearly related to the standard deviation of an asset.

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Definitions:

Clinical Trials

Research studies performed in people that are aimed at evaluating a medical, surgical, or behavioral intervention.

Risk Factor Approach

A method focusing on identifying and mitigating elements that increase the likelihood of developing diseases or injuries.

Community Trials

Studies that test the effectiveness of interventions on large groups or communities rather than individual participants to determine community-wide effects.

Researcher Bias

A form of bias that occurs when the preferences, beliefs, or prejudices of a researcher influence the conduct of research or interpretation of its results.