B) Systematic risk — the sensitivity of an assets returns to market returns. Beta measures how much an asset moves relative to the overall market. Beta > 1 = more volatile than market.

Beta measures:

A Total risk

B Systematic risk — the sensitivity of an assets returns to market returns

C Unsystematic risk only

D Standard deviation

✓ Correct Answer: Option B

Beta measures how much an asset moves relative to the overall market. Beta > 1 = more volatile than market.

💡 Why is B) the correct answer?

The correct answer to the question "Beta measures:" is Option B: Systematic risk — the sensitivity of an assets returns to market returns.

The other options — A) Total risk, C) Unsystematic risk only, D) Standard deviation — are incorrect for this CFA Exam Prep question. As explained above: Beta measures how much an asset moves relative to the overall market. Beta > 1 = more volatile than market.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Portfolio Management topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Beta measures:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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