. Which of the following statements about portfolio investment risk is false? a.

Question

. Which of the following statements about portfolio investment risk is false?

a. The beta coefficient measures the risk of investments held in portfolios.

b. A beta greater than 1.0 indicates that the investment has greater risk than that of the entire portfolio.

c. Standard deviation measures the risk of investments held in portfolios.

d. A beta less than 1.0 indicates that the investment has less risk than that of the entire portfolio.

e. The beta of a portfolio is a weighted average of the betas of the component investments.

Explanation / Answer

. Which of the following statements about portfolio investment risk is false?

c. Standard deviation measures the risk of investments held in portfolios.

Note : In an portfolio through diversification, standalone risk is being eliminated & only systematic risk remains, Beta is the systmatic risk which is associate with portfolio & it does not measure the standalone . The beta coefficient measures the risk of investments held in portfolios.

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