Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. explain why capm beta is thought to be a more rele

explain why CAPM beta is thought to be a more relevant measure of risk than standard...

90.2K

Verified Solution

Question

Finance

explain why CAPM beta is thought to be a more relevant measure ofrisk than standard deviation for a well-diversified investor

Answer & Explanation Solved by verified expert
4.3 Ratings (681 Votes)
Beta measures the volatility a stock adds to a diversified portfolio standard deviation is the volatility if the stock is the only asset in your portfolio So Beta is more important if you plan to hold a diversified portfolio standard    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

explain why CAPM beta is thought to be a more relevant measure ofrisk than standard deviation for a well-diversified investor

Other questions asked by students

Advance Math
1.2K views

FIND THE CENTROID: a. of the region enclosed between the curves y=x1/2 , y=1, y=2 and the...

Advance Math
1.2K views

5)   Solve 2yy’’ = 1 + (y’)^2

Biology
1.2K views

A reaction with a AG of 1 6 is endergonic and work needs to be...

Physics
1.2K views

7A capacitor of capacitance 5 00 uF is charged to 24 0 V and another...

Basic Math
1.2K views

Suppose that the quantity supplied S and quantity demanded D of T-shirts at a concert...

Basic Math
1.2K views

Suppose that the cost of a rental car is $65 for a week plus $0.15...

Algebra
1.2K views

1 55 Which of the following is the correct sequence of the three sections that...

Accounting
1.2K views

The Foundational 15 (Algo) [LO12-1, LO12-2, L012-3, LO12-5, L012-6] The foltowitg thitormation applies to the...

Accounting
1.2K views

Expenses are recognized only upon payment of cash. Select one: True or False

Accounting
1.2K views

A job cost sheet of Sandoval Company is given below. Job Cost Sheet JOB NO....

Finance
1.2K views

A debt safety ratio of 19 would be considered a low ratio. O True False

Finance
1.2K views

Bob has $2,500 invested in a bank that pays 1% annually. How long will it...