Standard Deviation and Beta Both Measure Risk, but They Are

question 51

Multiple Choice

Standard deviation and beta both measure risk, but they are different in that beta measures

• A) both systematic and unsystematic risk.
• B) only systematic risk, while standard deviation is a measure of total risk.
• C) only unsystematic risk, while standard deviation is a measure of total risk.
• D) both systematic and unsystematic risk, while standard deviation measures only systematic risk.
• E) total risk, while standard deviation measures only nonsystematic risk.

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Definitions:

Categorical

Pertaining to data that can be divided into specific groups or categories that are qualitatively distinct.

Tossing

The act of throwing something lightly or casually, often used in the context of flipping a coin or similar objects.

Coin

A piece of hard material, typically metal, used as money, bearing an official stamp or design.

Outcome

The result or consequence of an experiment, test, or study.