ch of the following is NOT true with respect to standard deviation as a measure of risk? Group of answer choices Standard deviation of return measures the sum of diversifiable and undiversifiable risk for a share. 2. Standard deviation contains more information about distribution of returns by comparison with the more crude approach of measuring the range of possible extreme values for return. 3. Standard deviation is measured in standard units, unlike variance which is measured in squared units, 4. Unlike Beta, standard deviation of return measures undiversifiable risk.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Which of the following is NOT true with respect to standard deviation as a measure of risk?
- Standard deviation of return measures the sum of diversifiable and undiversifiable risk for a share.
2. Standard deviation contains more information about distribution of returns by comparison with the more crude approach of measuring the range of possible extreme values for return.
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