Investors are less willing to hold an asset with a high beta because
A)such assets tend to be illiquid.
B)systematic risk cannot be diversified away.
C)idiosyncratic risk cannot be diversified away.
D)such assets tend to have lower expected returns.

Question

Quizplus · Accepted Answer

High beta assets have a higher correlation with the overall market, making them more vulnerable to systematic risk that cannot be diversified away. This is why investors are less willing to hold such assets. The other options do not directly relate to the concept of beta.

Investors Are Less Willing to Hold an Asset with a High