Which of the following statements about portfolio investment risk The beta coeff
ID: 2761321 • Letter: W
Question
Which of the following statements about portfolio investment risk The beta coefficient measures the risk of investments held in portfolios. A beta greater than 1.0 indicates that the investment has greater risk than that of the entire portfolio. Standard deviation measures the risk of investments held in portfohos. A beta less than 1.0 indicates that the investment has less risk than that of the entire portfolio. The beta of a portfolio is a weighted average of the betas of the component investments.Explanation / Answer
Answer - Following statement is false : Standard deviation measures the risk of investment held in portfolio as it is unable to tell about the active and passive risk in the investment.