The amount of systematic risk present in a particular risky asset, relative to the systematic risk present in an average risky asset, is called the particular asset's:

a. beta coefficient.

b. reward-to-risk ratio.

c. total risk.

d. diversifiable risk.

e. Treynor index

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Business

Bethany Maynard

4 December, 18:53

The amount of systematic risk present in a particular risky asset, relative to the systematic risk present in an average risky asset, is called the particular asset's:

a. beta coefficient.

b. reward-to-risk ratio.

c. total risk.

d. diversifiable risk.

e. Treynor index

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Answers (1)

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Jean Daugherty · Answer 1

Answer: Option A

Explanation: For finance, an investment's beta (β or beta coefficient) is a measure of risk as opposed to idiosyncratic variables resulting from vulnerability to current market fluctuations.

The financial assets ' equity pool has a beta of precisely 1. A beta under 1 may imply either a less volatility in investment than the market, or a volatile portfolio whose price changes are not closely linked to the industry. Beta is relevant because it calculates the risk of a diversification-free investment.

The amount of systematic risk present in a particular risky asset, relative to the systematic risk present in an average risky asset, is called the particular asset's:a. beta coefficient.b. reward-to-risk ratio.c. total risk.d. diversifiable risk.e. Treynor index

The amount of systematic risk present in a particular risky asset, relative to the systematic risk present in an average risky asset, is called the particular asset's:

a. beta coefficient.

b. reward-to-risk ratio.

c. total risk.

d. diversifiable risk.

e. Treynor index