How do investors calculate a potential investments risk level:

Question

Quizplus · Accepted Answer

Investors calculate a potential investment's risk level by calculating its beta, which measures the volatility of the investment in relation to the overall market. A beta of 1 indicates the investment has the same level of risk as the market, while betas above or below 1 indicate greater or lower risk levels, respectively. The higher the beta, the higher the risk associated with the investment.

How Do Investors Calculate a Potential Investments Risk Level