According to the CAPM, the Relevant Measure of Risk for a Stock

question 16

Multiple Choice

According to the CAPM, the relevant measure of risk for a stock held in a diversified portfolio is the _____ risk.

• A) unsystematic
• B) systematic
• C) diversified
• D) total

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Definitions:

Private Investors

Individuals or entities that invest their own funds into private businesses, startups, or real estate, seeking to earn a return.

Venture Capitalists

Individuals who fund early-stage companies and startups showing strong potential for expansion in return for ownership stakes.

Threshold Concept

Fundamental ideas in a discipline that, once understood, transform a learner's perspective and comprehension of that field.

Critical Mass

The minimum amount of something required to start or maintain a venture, especially relating to the number of users, clients, or adopters needed to make a service viable.