Answer-In the Capital Asset Pricing Model (CAPM), the beta (β) of a security measures its:

Beta measures the sensitivity of a securitys returns to movements in the overall market portfolio. It quantifies the systematic riskthe portion of risk that cannot be eliminated through diversification. The CAPM formula is ERi Rf i ERm - Rf.

Question

In the Capital Asset Pricing Model (CAP

M , the beta (β) of a security measures its:

A Total risk (standard deviation).

B Diversifiable (unsystematic) risk.

C Non-diversifiable (systematic) risk relative to the market.

D Expected return.

E Idiosyncratic variance.

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In the Capital Asset Pricing Model (CAP

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