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: Zin 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

Q

The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year...

Accounting
Q

When you drop a pebble from height H it reaches the ground with kinetic energy...

Physics
Q

The 2022 sophomore PSAT scores are normally distributed at East Richmond Hills High School with...

Calculus
Q

State the open intervals over which the function is a increasing b decreasing and c...

Algebra
Q

Operating Cash Flows (Direct Method) Calculate the cash flow in each of...

Accounting
Q

In CVP analysis, it is assumed the term 'cost' includes only manufacturing costs. it is...

Accounting
Q

Simplify the expression. (x^(-(1)/(2)))/(x^(-(1)/(8))) Write your answer using only positive ex Assume that all variables...

Accounting
Q

(b) Complete the consolidated worksheet for the year ending 30 June 2022 (In Sheet 3:...

Accounting
Q

EXHIBIT 14B-Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and...

Accounting
Q

Please answer questions 1-2 based on the following information: Kristin has a portfolio consisting of...

Finance
Q

Cost Accounting Fundamental of Cost Accounting 4th Edition Can someone please explain and show examples...

Accounting
Q

QC 12. Milton Industries expects free cash flow of $10 million each year. Milton's corporate...

Finance