The riskiness of individual assets
A) should be considered for the asset in isolation.
B) should be considered in the context of the effect on overall portfolio volatility.
C) combined with the riskiness of other individual assets (in the proportions these assets constitute of the entire portfolio)should be the relevant risk measure.
D) b and c.
E) none of these.

Question

Quizplus · Accepted Answer

The riskiness of individual assets should be considered in the context of their effect on overall portfolio volatility, as well as in combination with the riskiness of other individual assets in the portfolio. Therefore, both options B and C are relevant, making choice D the best option.

The Riskiness of Individual Assets