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:

Personality Factors

Distinct traits or characteristics that make up an individual's personality, often studied in psychology to understand human behavior.

Internal Factors

Elements within an individual or organization that influence behavior, decisions, and outcomes, such as values, skills, attitudes, and emotions.

Cross-Cultural Research

The study of how cultural factors affect different human behaviors.

Attributions

The process by which individuals explain the causes of behavior and events, either attributing them to external or internal factors.