The systematic risk of the market is measured by a:
A) beta of 1.
B) beta of 0.
C) standard deviation of 1.
D) standard deviation of 0.
E) variance of 1.

Question

Quizplus · Accepted Answer

The beta of 1 measures the systematic risk of the market. Beta is a measure of how closely the stock's returns will match the market's returns at large. Therefore, a beta of 1 implies that the stock's systematic risk is equal to the overall market's systematic risk.

The Systematic Risk of the Market Is Measured by A