Answer: Equivalent systematic risk to the market portfolio.

The systematic risk of a stock is quantified by its beta (β). The beta is calculated as: \[ \beta = \rho_{im} \times \frac{\sigma_i}{\sigma_m} \] Where: - \( \rho_{im} \) is the correlation between the stock and the market (0.6). - \( \sigma_i \) is the standard deviation of the stock's returns (25%). - \( \sigma_m \) is the standard deviation of the market's returns (15%). Substituting the values: \[ \beta = 0.6 \times \frac{0.25}{0.15} = 1 \] Since the beta of the stock equals 1, it indicates that the stock has the same level of systematic risk as the market portfolio. Therefore, the correct answer is **B**.

Author: LeetQuiz Editorial Team