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:

Protect Assets

Measures or strategies implemented by a company or individual to safeguard physical and intangible assets from loss, damage, or theft.

Internal Auditors

Professionals employed by an organization to perform audits on the efficacy and efficiency of its operations, ensuring adherence to laws and policies.

Internal Control Elements

Components of a framework designed to ensure the effectiveness and efficiency of operations, reliable financial reporting, and compliance with laws and regulations.

Petty Cash Fund

A small amount of cash kept on hand for minor, immediate expenses.