Which of the following statements about risk measures is correct?
A) Beta is the measure of total risk, whereas standard deviation is the measure of unsystematic risk.
B) Beta is the measure of unsystematic risk, whereas standard deviation is the measure of total risk.
C) Beta is the measure of total risk, whereas standard deviation is the measure of systematic risk.
D) Beta is the measure of systematic risk, whereas standard deviation is the measure of total risk.
E) Beta is the measure of total risk, whereas Standard deviation is the measure of systematic risk.

Question

Quizplus · Accepted Answer

Beta measures the systematic risk of an asset or portfolio, while standard deviation measures the total risk, including both systematic and unsystematic risks. Therefore, option D is the correct statement.

Which of the Following Statements About Risk Measures Is Correct