(TCO 8) Which of the following statements is true regarding systematic risk? Sel
ID: 2672221 • Letter: #
Question
(TCO 8) Which of the following statements is true regarding systematic risk? Select all that apply: (Points : 4)is diversifiable
is the total risk associated with surprise events
it is not project or firm specific
is measured by beta
7. (TCO 8) For this exercise, use the information provided for Problem 30 of Chapter 11 (page 375 of your textbook). Assume that the probability of the state of the economy has changed as follows:
The probability of a recession has increased to 30% and the probability for a normal state of economy is now 40%. The market risk premium has increased by 1% as well. Which statement is true? Select all that apply: (Points : 4)
Stock II has more risk than Stock I
Stock II has less systematic risk than Stock I
Stock I has a lower risk premium than Stock II
Stock I has a lower expected return than Stock II
need to select one answer for each question
Explanation / Answer
TCO 8. Systematic risk is market risk and is non diversifiable. Ans: is diversifiable (False) is the total risk associated with surprise events (False) it is not project or firm specific (True) is measured by beta (True)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.