The risk premium (hence expected return) of a security is determined by its risk and does not depend on its ___

Question

HACTEHA [7]

1 year ago

9

The risk premium (hence expected return) of a security is determined by its risk and does not depend on its ___

__ risk.

Business

1 answer:

Rzqust [24] · Answer 1 · 2024-02-09T10:23:09+03:00

Answer:

systematic risk ,diversifiable risk

Explanation:

risk premium is the investment return demanded by an investor for buying a risky assets that an investment is anticipated to deliver it reward to those who are willing to take higher risk than investors who prefer risk free investment.

systematic risk when economic treds influence assets and the market in similr way than investment risk for similr assets are corellated Systematic risk cannot be diversified away. Non-systematic risk, or the risk unique to each individual security, meanwhile, can be mitigated through diversification.

conclusion: both the sytematic and nom systematic risk are the influencing factor of the risk premium while sytematic risk is not influenced by market but diversfiable risk are influenced by market .

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The risk premium (hence expected return) of a security is determined by its ________ risk and does not depend on its ___________

The risk premium (hence expected return) of a security is determined by its risk and does not depend on its ___