Beta is a measure of security responsiveness to ________.
A) firm-specific risk
B) diversifiable risk
C) market risk
D) unique risk

Question

Quizplus · Accepted Answer

Beta measures how responsive a security is to changes in the overall market, which is known as market risk. It does not take into account specific risks that may be unique to a particular firm or investment (such as firm-specific risk or unique risk). Diversifiable risk can be reduced through diversification, but it is not directly related to a security's beta.

Beta Is a Measure of Security Responsiveness to ________