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The is the measure of the amount of systematic risk present in a particular risky asset relative to an average risky asset.
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- When adding a risky asset to a portfolio of may risky assets, which property of the asset has a greater influence on risk: its standard deviation or its covariance with other assets? ExplainBeta is defined as the: a. Amount of systematic risk in a risky asset relative to that in an average asset. b. Ratio of unsystematic risk in a risky asset relative to the systematic risk in the overall market. c. Amount of systematic risk in a risky asset relative to that of a risk-free asset. d. Ratio of the total risk in a risky asset relative to the systematic risk in the overall market. e. Slope of the security market line.The systematic risk principle states that the expected return on a risky asset depends only on which one of the following? Unsystematic risk Market risk Diversifiable risk
- Question Details Unsystematic risk is also known as unique risk. asset-specific risk. diversifiable risk. all of the aboveSystematic risk is defined as: a risk that specifically affects an asset or small group of assets. any risk that affects a large number of assets. any risk that has a huge impact on the return of a security. the random component of return. None of the above.Any risk involved a situation where there is a possibility of gain refers to: a. Liability risk b. Speculative risk c. Pure risk d. Personal risk
- Briefly define and give examples of each of the following components of total risk. Which type of risk matters, and why? Diversifiable (or firm-specific) risk Undiversifiable (or systematic) riskThe risk of the portfolio depends not only on the individual risks of the assets but also on the ________ between the asset returns.What is the best way to measure of risk for an asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?
- Risks that are insurable because their probabilities can be calculated precisely enough for the risk to be quantified. a) Speculative b) Explicit c) Measured d) PureDescribes the relationship between risk and return.What type of risk is the risk that belongs to the market as a whole? Systematic risk Unsystematic risk (or nonsystematic risk) Total risk
