Select all that are true with respect to why it is that systematic (and not unsystematic) risk is what matters when trying to understand discount rates. Group of answer choices Because systematic risk can be cheaply/easily eliminated through diversification Because discount rates are fully determined by an individual asset's risk Because unsystematic risk can be cheaply/easily eliminated through diversification Because in a competitive market, investors can largely eliminate unsystematic risk cheaply/easily, and thus, don't demand to be paid for bearing it.
Select all that are true with respect to why it is that systematic (and not unsystematic) risk is what matters when trying to understand discount rates. Group of answer choices Because systematic risk can be cheaply/easily eliminated through diversification Because discount rates are fully determined by an individual asset's risk Because unsystematic risk can be cheaply/easily eliminated through diversification Because in a competitive market, investors can largely eliminate unsystematic risk cheaply/easily, and thus, don't demand to be paid for bearing it.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Select all that are true with respect to why it is that systematic (and not unsystematic) risk is what matters when trying to understand discount rates.
Group of answer choices
Because systematic risk can be cheaply/easily eliminated through diversification
Because discount rates are fully determined by an individual asset's risk
Because unsystematic risk can be cheaply/easily eliminated through diversification
Because in a competitive market, investors can largely eliminate unsystematic risk cheaply/easily, and thus, don't demand to be paid for bearing it.
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