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From our discussion in this section, Security A has greater total risk, but it has substantially less systematic risk. Because total risk is the sum of systematic and unsystematic risk, Security A must have greater unsystematic risk. Finally, from the systematic risk principle, Security B will have a higher risk premium and a greater expected return, despite the fact that it has less total risk.

Ross et al.: Fundamentals I V. Risk and Return I 13. Return, Risk, and the I I © The McGraw-Hill of Corporate Finance, Sixth Security Market Line Companies, 2002

Edition, Alternate Edition

432 PART FIVE Risk and Return

Work the Web

Suppose you want to find the beta for a company like Amazon.com. One way is to go to the Web. We went to finance.yahoo.com, entered the ticker symbol AMZN for Amazon, and followed the "Profile" link. This is the result.

Price and Volume

52-Week Lew

(m4-Apr.2GDl

Recent Pnce

52-"Week High ond-Ssp-20CW

Beta

Stock Performance flteH tC) Yahoo

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