I’m having a hard time understanding the concept behind beta not taking into account unsystematic risk. For instance, imagine that tomorrow Apple suffers a terrorist attack, next month Tim Cook dies, in two months iOS is under a cyber attack, and in six months there’s a leak about a sex scandal among Apple’s top executives. Apple’s stock price will certainly be extremely volatile over the next year and consequently, its beta will soar. Therefore, Apple’s beta is surely reflecting the company’s unsystematic risk…
Where’s the flaw here please?