General Studies · Capital Asset Pricing Model
According to the Capital Asset Pricing Model (CAPM), what type of risk does the Beta (β) factor measure?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The risk premium over the risk-free asset rate
- 2The absolute maximum loss potential for any asset
- 3The systematic risk or volatility of the company's returns relative to the market average✓
- 4The specific, unsystematic risk of a single company
Correct answer
The systematic risk or volatility of the company's returns relative to the market average
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