One statistic that quantiﬁes the risk of an investment is
A) alpha.
B) beta.
C) gamma.
D) the average expected rate of return.

Question

Quizplus · Accepted Answer

Beta is a statistical measure of the volatility of an investment in relation to the market, representing the risk of an investment in comparison to the market as a whole. A higher beta indicates a higher risk, while a lower beta indicates a lower risk. Alpha is a metric that measures the performance of an investment against a benchmark index, while gamma is a measure of the rate at which delta changes in relation to the underlying asset's price movement. The average expected rate of return is not necessarily a measure of risk, as it does not take into account the level of volatility or potential losses associated with an investment.

One Statistic That Quantiﬁes the Risk of an Investment Is