While ________ seems to be a reasonable measure of risk when evaluating a large portfolio, the ________ of an individual security does not explain the size of its average return.
A) volatility, volatility
B) the mean return, standard deviation
C) mode, volatility
D) mode, mean return

Question

Quizplus · Accepted Answer

Volatility measures the degree of variation in a security's returns over time, and is commonly used in evaluating the risk of a portfolio. However, a security's volatility alone does not provide information about the size of its average return.

While ________ Seems to Be a Reasonable Measure of Risk