Which of the following is defined as the volatility of an investment,which includes firm specific risk as well as market risk?
A) Diversifiable risk
B) Market risk
C) Standard deviation
D) Total risk

Question

Quizplus · Accepted Answer

Total risk is defined as the volatility of an investment, which includes both firm-specific risk and market risk. Diversifiable risk (A) is the risk that can be eliminated through diversification, while market risk (B) only includes the risk of the market as a whole. Standard deviation (C) is a measure of risk that only includes variability in returns and does not account for firm-specific risks.

Which of the Following Is Defined as the Volatility of an Investment,which