The systematic (market)risk associated with an individual stock is most closely identified with the
A) Standard deviation of the returns on the stock.
B) Standard deviation of the returns on the market.
C) Beta of the stock.
D) Coefficient of variation of returns on the stock.
E) Coefficient of variation of returns on the market.

Question

Quizplus · Accepted Answer

Beta is a measure of a stock's sensitivity to market movements. A stock with a beta of 1.0 has the same systematic risk as the overall market, while a beta of greater than 1.0 implies higher risk and a beta of less than 1.0 implies lower risk. Therefore, beta is the closest measure to identify the systematic risk associated with an individual stock.

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