Which of the Following Measures Captures the Effects of Both

question 55

Multiple Choice

Which of the following measures captures the effects of both risk and return, which makes it a better measure than standard deviation for evaluating stand-alone risk in situations where investments differ with respect to both their amounts of total risk and their expected returns?

• A)Probability distribution of the investment's returns
• B)Expected average rate of returns of the investment
• C)Correlation coefficient of one investment with another investment
• D)Coefficient of variation
• E)Beta coefficient

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Definitions:

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