Which of the following statements about portfolio investment risk The beta coeff

Question

Which of the following statements about portfolio investment risk The beta coefficient measures the risk of investments held in portfolios. A beta greater than 1.0 indicates that the investment has greater risk than that of the entire portfolio. Standard deviation measures the risk of investments held in portfohos. A beta less than 1.0 indicates that the investment has less risk than that of the entire portfolio. The beta of a portfolio is a weighted average of the betas of the component investments.

Explanation / Answer

Answer - Following statement is false : Standard deviation measures the risk of investment held in portfolio as it is unable to tell about the active and passive risk in the investment.

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