Which Is the Best Measure of Risk for an Asset

question 21

Multiple Choice

Which is the best measure of risk for an asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?

• A) Variance; correlation coefficient.
• B) Standard deviation; correlation coefficient.
• C) Beta; variance.
• D) Coefficient of variation; beta.
• E) Beta; beta.

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Definitions:

First-Price Auction

An auction format in which the highest bidder wins the item and pays the price they bid.

True Values

The actual, inherent worth or validity of something, often contrasted with perceived or estimated values.

Selling Price

The amount of money a buyer pays to acquire a product or service from a seller.

Vickery Auction

An auction model wherein bidders submit sealed bids, the highest bidder wins but pays the price offered by the second-highest bid, promoting truthful bidding.