Beta measures risk of an individual portfolio in relation to market portfolio. It is calculated as:

CS Executive · Financial and Strategic Management · PYQS · December 2024
Beta measures risk of an individual portfolio in relation to market portfolio. It is calculated as:
(A) Risk of Market Portfolio/Total Risk of Portfolio
(B) Total risk of portfolio/Risk of Market Portfolio
(C) Diversifiable risk of portfolio/Risk of Market Portfolio
(D) Non-diversifiable risk of portfolio/Risk of Market Portfolio

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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