Grades 1 Through 8 Are Very Precise Grades

question 4

True/False

Grades 1 through 8 are very precise grades.

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Definitions:

Security Market Line

A graphical representation in financial market theory that depicts the relationship between risk (measured as beta) and expected return for the entire market.

Beta

A way of measuring the level of erratic behavior, or systemic threat, in a security or investment group in perspective of the general market.

Expected Return

The average of all possible returns for an investment, weighted by their respective probabilities.

Portfolio Standard Deviation

A measure of the dispersion of returns from a portfolio, indicating the portfolio's risk.