What is the relevant risk of a stock and how is it measured and How is this information useful to an investor?

The relevant risk of a stock refers to the portion of its total risk that cannot be diversified away, primarily measured by beta, which indicates the stock's volatility in relation to the overall market. A beta greater than one suggests higher risk and potential returns, while a beta less than one indicates lower risk. This information is useful to investors as it helps them assess the stock's risk profile relative to their investment goals and market conditions, allowing for better-informed portfolio decisions. Understanding relevant risk aids in balancing potential returns against the investor's risk tolerance.