Standard Deviation and Beta Both Measure Risk, but They Are

question 51

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.
• E) total risk, while standard deviation measures only nonsystematic risk.

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Definitions:

Issuers

Entities that create and issue financial securities, such as stocks and bonds, to finance operations, expand their business, or undertake new projects.

Registration Statement

A set of documents, including a prospectus, filed with the Securities and Exchange Commission (SEC) for a company intending to go public.

SEC

stands for the Securities and Exchange Commission, which is a U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry.

Securities Violation

An infraction of the laws regulating the sale, purchase, and trading of stocks, bonds, and other financial instruments.