Is unsystematic risk eliminated when beta is 1

CFA Level III Economics
#1

When beta is 0, systematic risk is eliminated.

What if beta is 1, is unsystematic risk eliminated?

#2

No.

#3

If systematic risk is to be removed, what should beta be?

#4

Zero, as you wrote above.

#5

Apologize for my typo…

Actually I mean if unsystematic risk is to be removed, what should beta be?

#6

Beta doesn’t tell you about unsystematic risk.

#7

The more you diversify a portfolio, the more you reduce unsystematic risk, not sure you can eliminate it.

#8

The common wisdom is that with about 30 (carefully chosen) securities, you can eliminate systematic risk.

But it has nothing to do with beta.

1 Like
#9

Or by using a market neutral strategy (alpha strategy)