Why Is Beta Thought to Be a More Relevant Measure

question 80

Essay

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

---

Definitions:

Policy Makers

Individuals or groups responsible for creating and implementing policies and decisions in governmental or organizational settings.

Proposal

A formal suggestion or plan, typically detailed in a document, outlining a course of action or project.

Excise Tax

A tax imposed on specific goods, services, or transactions, often with the goal of discouraging their consumption or generating revenue.

Imposed

Placed or set upon as an obligatory requirement, often by authority.