The efficient portfolio provides the benchmark that identifies ________ present in the economy.
A) the nonsystematic risk
B) the uncommon risk
C) the undiversifiable risk
D) the systematic risk

Question

Quizplus · Accepted Answer

The efficient portfolio is comprised of assets with the lowest possible level of diversifiable risk or nonsystematic risk. Therefore, the remaining risk in the portfolio is systematic risk that cannot be diversified away. Thus, the efficient portfolio provides the benchmark that identifies systematic risk present in the economy.

The Efficient Portfolio Provides the Benchmark That Identifies ________ Present