Final answer:
True, The beta of a company measures its systematic risk and can indeed be positive, zero, or negative. It indicates the stock's volatility in comparison to the market, with a higher beta signaling higher risk and potential return.
Step-by-step explanation:
The statement that the beta of a company measures the systematic risk of this company, which can be positive, zero, or negative, is true. Beta is a financial measure that represents the tendency of a company's stock price to respond to swings in the market. A beta greater than 1 suggests that the stock price is more volatile than the market, a beta less than 1 suggests it is less volatile, and a beta of zero implies no correlation with the market. A negative beta indicates an inverse relationship to market movements. Therefore, beta does measure the systematic risk associated with a particular company.
Systematic risk is unavoidable and is related to factors such as economic, political, and social events that impact the entire market. Investors use beta to assess the risk level of an asset as part of their portfolio strategy. For instance, high-beta stocks are often considered riskier but may offer higher returns, whereas low-beta stocks are generally considered safer with potentially lower returns.