Standard Deviation and Beta Both Measure Risk, but They Are

question 4

Multiple Choice

Standard deviation and beta both measure risk, but they are different in that beta measures

• A)both systematic and unsystematic risk.
• B)only systematic risk, while standard deviation is a measure of total risk.
• C)only unsystematic risk, while standard deviation is a measure of total risk.
• D)both systematic and unsystematic risk, while standard deviation measures only systematic risk.

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Definitions:

Apparent Authority

A form of authority that a third party perceives to exist based on the principal’s behavior, even if no actual authority has been granted by the principal to the agent.

Agency Relationship

A legal arrangement in which one party, the agent, is authorized to act for another, the principal, in business transactions.

Principal

In finance, the original sum of money borrowed or invested, excluding any interest or profit. In legal contracts, the party who authorizes an agent to act on their behalf.

Course And Scope

Refers to activities that are conducted within the bounds of an employee's job duties and during employment.