Standard deviation and beta both measure risk,but they are different in that
A)beta measures both systematic and unsystematic risk.
B)beta measures only systematic risk while standard deviation is a measure of total risk.
C)beta measures only unsystematic risk while standard deviation is a measure of total risk.
D)beta measures both systematic and unsystematic risk while standard deviation measures only systematic risk.
E)beta measures total risk while standard deviation measures only nonsystematic risk.

Question

Quizplus · Accepted Answer

Beta measures only systematic risk, which is the risk that is inherent in the entire market or a particular segment of the market. Standard deviation, on the other hand, measures the total risk, which includes both systematic and unsystematic risk.

Standard Deviation and Beta Both Measure Risk,but They Are Different