Systematic risk is measured by:
A)beta.
B)the arithmetic average.
C)the geometric average.
D)the covariance.
E)the standard deviation.

Question

Quizplus · Accepted Answer

Systematic risk is measured by beta, which is a standardized measure of an asset's volatility in relation to the overall market. Beta measures the asset's sensitivity to changes in the market, and therefore represents the systematic risk of the asset. The other options (arithmetic average, geometric average, covariance, and standard deviation) are not specific measures of systematic risk.

Systematic Risk Is Measured By