Choose the correct answer for the following: (1)Which is the best measure of risk for choosing an asset which is to be held in isolation? (2)Which is the best measure for choosing an asset to be held as part of a diversified portfolio?
A) Variance;correlation coefficient.
B) Standard deviation;correlation coefficient.
C) Beta;variance.
D) Coefficient of variation;beta.
E) Beta;beta.

Question

Quizplus · Accepted Answer

The coefficient of variation is best for assessing risk when an asset is held in isolation, as it considers both risk and return. Beta is best for a diversified portfolio, as it measures an asset's volatility relative to the market.

Choose the Correct Answer for the Following: (1)Which Is the Best