Which of the Following Is a Reason for Beta Being

question 10

Multiple Choice

Which of the following is a reason for beta being considered as a relevant measure risk,instead of variance?

• A)The marginal variance determines the incremental risk from adding a small amount of the investment to the portfolio.
• B)The total variance determines the incremental risk from adding a small amount of the investment to the portfolio.
• C)The total variance of the asset added determines the total risk of the portfolio.
• D)The marginal risk of the portfolio is unaffected by the variance in the returns of the individual assets in the portfolio.