The total risk for a security can be measured by its
A) beta with the market portfolio.
B) systematic risk.
C) standard deviation of returns.
D) unsystematic risk.
E) alpha with the market portfolio.

Question

Quizplus · Accepted Answer

The total risk for a security can be measured by its standard deviation of returns, which incorporates both systematic (market-related) risk and unsystematic (company-specific) risk. Beta (A) only measures systematic risk, alpha (E) measures excess returns compared to the market but not total risk, and unsystematic risk (D) is only a subset of total risk.

The Total Risk for a Security Can Be Measured by Its