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A stock’s contribution to the market risk of a well-diversified portfolio is called ______ risk. It can be measured by a metric called the beta coefficient, which calculates the degree to which a stock
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A stock’s contribution to the market risk of a well-diversified portfolio is called ______ risk. It can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market.

a. relevant
b. unsystematic

User Pladnius Brooks
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Answer:

a. relevant

Step-by-step explanation:

Systematic Risk & Beta systematic and unsystematic risk. When a portfolio is diversified the unsystematic risk eliminates and systematic risk remains. The systematic risk can be measured by beta of the investment or portfolio. This is also called relevant risk and it is measured by the beta coefficient. So the correct answer is a. relevant.

User Kirdok
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