Is a Measure of Total Risk, Whereas Is a Measure

question 7

Multiple Choice

is a measure of total risk, whereas is a measure of systematic risk.

• A)Standard deviation; beta
• B)Beta; standard deviation
• C)Standard deviation; variance
• D)Coefficient of variation; standard deviation
• E)None of the above is correct.

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Definitions:

Margin

The practice of buying an asset by using funds borrowed from a broker, often used in stock trading to leverage investments.

Futures Contract

A standardized legal agreement to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time in the future.

Zero Coupon Interest Rate

An interest rate that applies to a bond or loan that does not pay periodic interest, only paying the face value at maturity.

Arbitrage Profit

The profit realized from exploiting the price difference of the same or similar financial instruments on different markets or in different forms.