The amount of systematic risk present in a particular risky asset,relative to the systematic risk present in the market,is called the particular asset's:
A)beta coefficient.
B)reward-to-risk ratio.
C)total risk.
D)diversifiable risk.
E)Treynor index.

Question

Quizplus · Accepted Answer

The beta coefficient measures the amount of systematic risk present in a particular risky asset, relative to the systematic risk present in the market. In other words, it measures the sensitivity of an asset's returns to market movements. A high beta indicates that the asset is more volatile than the market, while a low beta indicates that the asset is less volatile than the market. Therefore, A) is the correct answer. B) Reward-to-risk ratio, C) total risk, D) diversifiable risk, and E) Treynor index are not measures specifically related to the amount of systematic risk present in a particular asset.

The Amount of Systematic Risk Present in a Particular Risky