Solved

The Variance of Returns for a Risky Asset Is 25

Question 44

Multiple Choice

The variance of returns for a risky asset is 25 percent. The variance of the error term, Var(e) , is 8 percent. What portion of the total risk of the asset, as measured by variance, is systematic?


A) 32 percent
B) 8 percent
C) 68 percent
D) 25 percent
E) 75 percent

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q39: USE THE INFORMATION BELOW FOR THE FOLLOWING

Q40: Assume that the risk-free rate of return

Q41: In the APT model, the identity of

Q42: In a microeconomic (or characteristic)-based risk factor

Q43: Assume that as a portfolio manager the

Q45: The planning period for the CAPM is

Q46: USE THE INFORMATION BELOW FOR THE

Q47: The expected return for a stock, calculated

Q48: The APT does not require a market

Q49: USE THE INFORMATION BELOW FOR THE FOLLOWING