This Question: 1 pt 9 of 14 (8 complete) Measuring Risk. Why do investors measur

Question

This Question: 1 pt 9 of 14 (8 complete) Measuring Risk. Why do investors measure risk? Describe the two common measures of risk Investors want to measure risk to understand the: (Select the best answer below.) O A. degree of uncertainty surrounding their future returns O B. calculation of exact future profits O C. estimation of long-term profits. O D. degree of volatility surrounding their future returns. Two terms that measure risk are: (Select the best answer below OA. high range and low range O B. range of return and standard deviation of the returns. O C. return range and standard degrees of volatility OD. volatility index and degrees of return Click to select your answer

Explanation / Answer

Solution:

Q1.

Investor wants to measure risk because they want to understand the degree of certainty related with future return and this can be achieved by seeing the volatility or standard deviation

Option A looks correct in this regard

Q2.

The nost common method that is used to measure risk is Standard deviation of the return. We can also measure risk by seeing the range of return , though it is less useful as compared to standard deviation.

Correct Option is B) Range of return and standard deviation of return

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