Gransazer2918 Gransazer2918
  • 09-09-2020
  • Business
contestada

The market rewards investors for bearing ____________ risk.a. diversifiableb. undiversifiablec. unsystematicd. total

Respuesta :

ewomazinoade ewomazinoade
  • 14-09-2020

Answer:

B

Explanation:

According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)

systemic risk or undiversifiable is measured by beta . It is the risk that cannot be eliminated by diversifying portfolio

unsystemic risk or diversifiable is risk specific to a business and it can be eliminated by diversifying portfolio

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