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vinsu, Professor
Category: Finance
Satisfied Customers: 522
Experience:  MBA in Finance and Marketing
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business finance

Customer Question

which is the best measure of risk for an asset held in isolation? which is best the best measure for an asset held in a diversified portfolio?
a. variance;correlation coefficint
b. standard deviation; correlation coefficient
c. coeffiecient of variation; beta
d. beta;beta
Submitted: 11 years ago.
Category: Finance
Expert:  vinsu replied 11 years ago.

The answer is c.

For an asset in isolation we are interested in its variability of returns that can be found from the coefficient of variation. In aportfolio we are interested in the risk of an asset in a pertfolio and that is given by beta