Why Is Beta Thought to Be a More Relevant Measure

question 60

Essay

Why is Beta thought to be a more relevant measure of risk than standard deviation for a diversified investor?

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Definitions:

Ethics

A branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior.

Compulsive Consumption

The uncontrollable drive to purchase goods or services in an excessive or unnecessary manner, often leading to psychological stress or financial problems.

Obsessive Need

refers to an overpowering, persistent desire or compulsion to act or obtain something, often beyond rationality.

Shopaholics

Individuals with a compulsive shopping behavior, often buying more than needed or can afford, leading to financial and emotional distress.