Asked by Chloe Cluchey on Jul 14, 2024

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The expected return on an individual asset depends only on that asset's ____ risk.

A) Total.
B) Incremental.
C) Systematic.
D) Unsystematic.
E) Portfolio.

Systematic Risk

A type of risk that is associated with the overall market or a particular market segment, often called market risk.

Expected Return

The average amount of profit or loss one can anticipate receiving on an investment, accounting for all possible outcomes.

Incremental Risk

The additional risk that an investment or action brings to an investor's or company's overall risk profile.

  • Comprehend the correlation between the anticipated return of an asset and its inherent risk.
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MG
Miranda GregoryJul 20, 2024
Final Answer :
C
Explanation :
The expected return on an individual asset depends only on that asset's systematic risk, which is the risk inherent to the entire market or market segment. Systematic risk, also known as market risk, cannot be eliminated through diversification.