The market (systematic)risk associated with an individual shares is most closely identified with the
A)variance of the returns of the shares.
B)variance of the returns of the market.
C)beta of the shares.
D)standard deviation of the shares.

Question

Quizplus · Accepted Answer

The beta of a stock measures its systematic risk relative to the market. A stock with a beta greater than 1 indicates that it is more volatile than the market, while a beta less than 1 suggests it is less volatile than the market. Therefore, the market risk associated with an individual share is most closely identified with its beta. Variance of returns or standard deviation of returns measure total risk, which includes both systematic and unsystematic risk. The variance of the market returns is not specific to an individual share.

The Market (Systematic)risk Associated with an Individual Shares Is Most