Question
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
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