In: Finance
Systematic risk of financial assets:
Group of answer choices
can be effectively eliminated by portfolio diversification.
is not priced risk
is measured by beta.
is measured by standard deviation.
is related to the industry specific factors.
Total risk is a sum of systematic risk and Unsystematic risk
Systematic Risk - the risk associated with the overall market. Systematic risk cannot be eliminated through diversification and Beta is a measure of systematic risk. Beta is a measure of the systematic risk of a particular financial asset
Unsystematic risk or Diversifiable risk - Unsystematic risk is specific to a particular firm or industry, such types of risk can be eliminated through diversification
Systematic risk of financial assets is measured by beta
Correct Answer -> is measured by beta