Which Is the Best Measure of Risk for an Asset

question 30

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:

Special

Distinguished by a unique or particular quality, purpose, or condition from what is ordinary or common.

Overdue

A status indicating that a payment or obligation was not fulfilled or completed by its due date.

Holder In Due Course

A party possessing a negotiable instrument, such as a check, who took the instrument in good faith, for value, and without notice of any defect or claim against it.

Cashed Check

A check that has been presented to a bank or financial institution and exchanged for the equivalent amount in cash.