If an Individual Owns Only One Security, What Is the Most

question 34

Multiple Choice

If an individual owns only one security, what is the most appropriate measure of risk?

• A) Standard deviation
• B) Correlation
• C) Beta
• D) Covariance
• E) All of the above.

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Definitions:

Probability Density Function

A mathematical expression that represents how likely it is for a random variable to assume a specific value.

Continuous Random Variable

A random variable that can take any value within a given range, including fractions and decimals.

Positive Value

A number greater than zero.

Z

Often referred to in statistics as a standard score, it represents the number of standard deviations a data point is from the mean.