The risk of a portfolio can be quantified by:
A) Specifying the probability associated with each possible future outcome.
B) The dispersion of the possible returns below the expected value.
C) The variance of the portfolio returns.
D) The standard deviation of portfolio returns.
E) All of the above.

Question

Quizplus · Accepted Answer

All the options provided (A, B, C, D) are methods to quantify the risk of a portfolio. Specifying probabilities for future outcomes, measuring dispersion of returns, and calculating the variance or standard deviation of returns are all valid approaches to assess and quantify risk.

The Risk of a Portfolio Can Be Quantified By