Which of the following is true? A. A stock’s systematic risk can be diversified away by...

Which of the following is true? A. A stock’s systematic risk can be diversified away by adding it to a portfolio. B. Investors should not be compensated for bearing nondiversifiable risk. C. Beta is a measure of the nonsystematic risk of an asset. D. None of the answers are correct.

Expert Solution

Option A.

Stock's systematic risk is a diversifiable risk. It is a type of risk that comes with the industry you invest in. It can be managed by ensuring that the portfolio is diversified with wide variety of asset classes.

jeff jeffy answered 2 years ago

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