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III.Essay Questions 91.Explain the difference between systematic and nonsystematic risk. 92.If you

Question : III.Essay Questions 91.Explain the difference between systematic and nonsystematic risk. 92.If you : 1400434

 

III.Essay Questions

91.Explain the difference between systematic and nonsystematic risk.

92.If you were to regress the historical returns of a stock on the historical return of a general market index, you would plot the line of best fit through those data points. The slope of that line represents the beta of the stock in question. However, in most instances the date points do not lie exactly on that line. Describe why.

 

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