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Basic Question 3 of 8

Standard deviation is a measure of ______.

A. systematic risk
B. unsystematic risk
C. total risk
D. diversifiable risk
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User Contributed Comments 6

User Comment
sergashev good question
nike12 Can someone pls explain the difference between systematic and unsystematic risk?
BigJimStud Systematic risk is market risk which you cannot diversify away. Unsystematic risk is the risk inherent to the asset itself. BY adding more and more assets to a portfolio you diversify this type of risk away to the point where it's neglible, leaving only the market risk which obviously can never be diversified away. Std Deviation and variance cover both
sarathbs Thanks BigJim
davcer std dev= total risk beta=systematic risk
ibrahim18 @BogJimStud. how did you get here?
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Learning Outcome Statements

explain systematic and nonsystematic risk, including why an investor should not expect to receive additional return for bearing nonsystematic risk

CFA® 2025 Level I Curriculum, Volume 2, Module 2.