Traditional Quiz 2
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Which of the following has a beta of zero?
a risk-free asset
According to the capital asset pricing model, the appropriate measure for risk is:
beta.
Which type of risk cannot be eliminated by diversification?
market risk
A stock's beta is a measure of its:
market risk.
You are considering buying stock in New England Bankshares Corporation. Which of the following are examples of risk that can be diversified away?
risk resulting from an impending lawsuit against New England Bankshares. risk resulting from a strike by New England's tellers.