The risk associated with dispersion around an expected value (e.g., expected return) is measured by the
A) beta coefficient
B) range (i.e., high‑low values)
C) standard deviation
D) debt to total assets (i.e., the debt ratio)

Question

The risk associated with dispersion around an expected value (e.g., expected return) is measured by the​
A) ​beta coefficient
B) ​range (i.e., high‑low values)
C) ​standard deviation
D) ​debt to total assets (i.e., the debt ratio)

Quizplus · Accepted Answer

The standard deviation measures the amount of dispersion or variability of a set of data points around their expected value. It provides an indication of the degree of risk associated with an investment, with a higher standard deviation indicating a higher level of risk. Beta coefficient measures the sensitivity of an investment's returns to changes in the market, while range and debt ratio are not appropriate measures of risk associated with dispersion.

The Risk Associated with Dispersion Around an Expected Value (E