Which of the following best measures the risk of holding an asset in isolation (i.e. ,stand-alone risk)?
A)The mean co-variance
B)The standard deviation
C)The coefficient of optimization
D)The standard asset pricing model
E)The correlation

Question

Quizplus · Accepted Answer

The standard deviation is a measure of the volatility, or the degree of fluctuation of returns, of an individual asset. It is the most commonly used measure of stand-alone risk because it takes into account all possible outcomes and the likelihood of each of those outcomes occurring. The higher the standard deviation, the greater the risk associated with holding the asset in isolation.

Which of the Following Best Measures the Risk of Holding