Which Is the Best Measure of Risk for an Asset

question 5

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

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Definitions:

Bipolar Disorders

A group of mood disorders characterized by dramatic shifts in a person's mood, energy, and ability to function, including periods of mania and depression.

Cognitive Therapy

A form of therapy that focuses on how clients’ cognitions (e.g., expectations, attitudes, and beliefs) lead to distress and may be modified to relieve distress and promote adaptive behavior.

Beliefs

Mental attitudes or convictions held by an individual or group regarding the truth or existence of something.

Attitudes

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.