To determine the risk premium associated with an asset's expected return, two components of the return are usually cited, only the first, the covariance of the asset's return with the market portfolio, is used, because ________
A) the risk associated with the asset depends on the market risk
B) it is the only part of the asset's expected return that has risk
C) the risk of the second component can be diversified away
D) the market risk is the most difficult to calculate
Answer: C
Business
You might also like to view...
Identify and explain the traits necessary to become an effective leader
What will be an ideal response?
Business
The Privacy Rights Clearinghouse is a non-profit organization that provides reports, guidelines, education, and research on securing your personal information
Indicate whether the statement is true or false
Business