Asked by Bennie Raymond on Jul 07, 2024
Verified
Risk can be viewed as:
A) the degree of variability of return.
B) the standard deviation of the probability distribution of return.
C) the chance that return will be less than expected.
D) a value neutral concept.
E) All of the above
Probability Distribution
A mathematical function that calculates the likelihood of various possible results happening in an experiment.
Standard Deviation
A statistical measure that quantifies the variability or dispersion of a set of data points or investment returns.
Variability
Describes the extent to which data points in a data set or distribution differ from the average or mean value.
- Define risk in investment and understand its measurement.
Verified Answer
PS
Pranav SainiJul 12, 2024
Final Answer :
E
Explanation :
All of the above are valid ways of viewing risk. Risk can refer to the degree of variability or uncertainty in returns, which could be measured by standard deviation or other statistical measures. Additionally, risk could encompass the likelihood of achieving returns lower than expected, which could be influenced by various economic or market factors. Risk is a value-neutral concept that could affect a range of investment decisions and strategies.
Learning Objectives
- Define risk in investment and understand its measurement.