FINC 301 Test 3

Risk that influences all assets across an asset class is called ____.

systematic

Unsystematic risk is _____-specific

asset

Total risk is measured in terms of _____ ______.

standard deviations

The Principle of ______ claims spreading investment funds across a number of indiviudal assets will eliminate most of the unsystematic risk

Diversification

Non-diversifiable risk is comprised of ______ and ______ risk.

systemtic, unsystemic

Large portfolios can diversify away most _____ risk, but you are left with _______ risk.

unsystematic, systematic

____ is a number which indicates the systematic risk of a specific asset compared to the systematic risk of an average asset.

beta

A _____ beta indicates that the investment moves in a direction opposite to the particular asset class.

negative