The Systematic Risk of the Market Is Measured by A

question 97

Multiple Choice

The systematic risk of the market is measured by a:

• A)beta of 1.0.
• B)beta of zero.
• C)standard deviation of 1.0.
• D)standard deviation of zero.
• E)variance of 1.0.

---

Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates that the stock's price is more volatile than the market.

Volatile

Refers to the degree of variation in the price of a financial instrument over a period of time, indicating the level of risk associated with it.

Standard Deviation

A statistical measure that represents the dispersion or variability of a dataset relative to its mean.

Diversified

A strategy that involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to risk.