The systematic risk of the market is assigned 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 systematic risk of the market is measured by its beta, which is equal to 1 by definition. A beta of 1 represents the average risk of the market as a whole. A beta greater than 1 indicates higher risk, and a beta less than 1 indicates lower risk. Therefore, choice A is the correct answer. Choices B, C, D, and E are incorrect because they do not accurately represent the measurement of systematic risk.

The Systematic Risk of the Market Is Assigned a