CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Which of the following components of risk is most relevant in terms of determining required return?
A. Total risk
B. Unsystematic risk
C. Systematic risk
Explanation: Systematic risk: risk inherent in an investment, related to movements in the market that cannot be diversified away.

User Contributed Comments 5

User Comment
zwer Should I invest in the US junk bonds rather than Polish govenment bonds?
johnfuller what's your point?
CocaColas Doesn't the mention of "required return" in the question suggest the CML and hence total risk instead of the SML and systematic risk?
shiva5555 Doesn't total risk include both of the others, therefore making it more relevant?
leon121 A is not the answer. Why? While Total Risk is what investor is looking at...systematic risk is far more important as it is undiversifiable. First step is to look at where to invest....U.S. vs. Europe, etc.
You need to log in first to add your comment.