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:

Low-income Consumers

Individuals or households with limited financial resources that affect their purchasing power and consumption patterns.

National Brands

Brands that are marketed and recognized across an entire country, often distinguishing them from local or private-label brands.

Extreme-value Retailers

Stores that provide products at significantly lower prices than those of their competitors, often focusing on discount or budget items.

General Merchandise

A broad category of products that encompasses a wide variety of goods, often sold by large retail chains.