Which of the following statements best describes what the R-squared of 52

The answer is option A.

R-Squared of 52.6% in the regression that estimates the beta of Goldman Sachs is telling that 52.6% of the total risk is market risk.

R-Squared is the coefficient of determination which is defined by the following formula.

Explained variation in the regression / Total variation in the regression.

Therefore, 52.6% of R-Squared explains that it is the explained proportion of market risk out of the total risk.

Option B is incorrect because it describes R-Squared as the total risk instead of the explained portion of market risk.

Option C is incorrect as option A gives the right answer.

Option D is incorrect as R-Squared measure of 52.6% is not the measure of beta rather it describes the explained proportion of market risk in the total risk.

Option E is incorrect as 52.6% of the total risk is not the specific risk rather it is a component which must be used to calculate the specific risk in an easier way.