Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

12.Idiosyncratic risk is also referred to as: A)market risk or non-diversifiable risk B)market risk or diversifiable risk C)security-specific risk or non-diversifiable risk D)security-specific risk or

12.Idiosyncratic risk is also referred to as:

A)market risk or non-diversifiable risk

B)market risk or diversifiable risk

C)security-specific risk or non-diversifiable risk

D)security-specific risk or diversifiable risk

E)None of the above

13.Standard deviation and alpha both measure risk, but they are different in that alpha measures:

A)Total risk, while standard deviation measures only nonsystematic risk

B)Only systematic risk, while standard deviation is a measure of total risk

C)Both systematic and unsystematic risk

D)Both systematic and unsystematic risk, while standard deviation measures only systematic risk

E)Only unsystematic risk, while standard deviation is a measure of total risk

14.As diversification increases, the diversifiable risk of a portfolio approaches:

A)0

B)1

C)The variance of the market portfolio

D)Infinity

E)None of the above

I'm confused about the unsystemic risk and systemic risk. which part are they shows in CAPM function

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Multinational Business Finance

Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett

15th edition

134796551, 134796550, 978-0134796550

More Books

Students also viewed these Finance questions