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Which of the Following Statements Concerning Risk Are Correct

question 8

Multiple Choice

Which of the following statements concerning risk are correct?
i.Systematic risk is measured by beta.II.The risk premium increases as unsystematic risk increases.III.Systematic risk is the only part of total risk that should affect asset prices and returns.IV.Diversifiable risks are market risks you cannot avoid.


Definitions:

Price-Earnings Ratio

The price-earnings ratio (P/E ratio) is a valuation ratio of a company's current share price compared to its per-share earnings.

Market Price

The present trading value for assets or services within the scope of a commercial market.

Shares Of Stock

Units of ownership interest in a corporation or financial asset, giving shareholders a proportion of the corporation's assets and profits.

Profit Margin

A financial metric representing the percentage of revenue that remains as profit after all expenses are deducted.

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