Beta is a measure of unsystematic risk.

Question

Quizplus · Accepted Answer

Beta is a measure of systematic risk, which is the risk that is inherent in the market or economy as a whole and affects all securities. Unsystematic risk, also known as specific risk or diversifiable risk, is the risk that is specific to an individual company or asset and can be reduced through diversification. Beta measures the degree to which a security's price movements are correlated with movements in the overall market.

Beta Is a Measure of Unsystematic Risk