A stock whose return does not depend on overall economic conditions has a high systematic risk.

Question

Quizplus · Accepted Answer

A stock whose return does not depend on overall economic conditions has a low systematic risk. Systematic risk refers to the risk that cannot be diversified away, and is primarily caused by factors that affect the entire market or a particular industry. If a stock is not affected by such broad economic factors, its systematic risk is low. However, the stock may still have idiosyncratic risk or risk specific to the company itself.

A Stock Whose Return Does Not Depend on Overall Economic