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The standard deviation or volatility (square root of the variance) of returns.
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∙ 11y ago
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How should the measure of risk of an asset be interpreted?
Risk is necessary in the investment world. The absolute measure of risk is the standard deviation which is a statistical measure of dispersion. The distribution curve shows how much an asset can deviate from its expected outcome.
The portion of total risk that remains after unacceptable risk has been determined is .?
total
Distingush between systematic and unsystematic risks which is often regarded as the only relevant risk and why?
It is the risk which is due to the factors which are beyond the control of the people working in the market and that's why risk free rate of return in used to just compensate this type of risk in market. This is the risk other than systematic risk and which is due to the factors which are controllable by the people working in market and market risk premium is used to compensate this type of risk. Total Risk = Systematic risk + Unsystematic Risk As systematic risk is beyond the control of people working in market that;s why it is defenately not the relevent risk because anything not controllable is irrelevant and that's why unsystematic risk is the relevant risk because it is in the control of investor to in which security to invest or not.
What are qualitaive quantitative methods for risk management?
Qualitative Risk AnalysisThis is used to prioritize risks by estimating the probability of the occurrence of a risk and its impact on the project.Quantitative Risk AnalysisThis is used to perform numerical analysis to estimate the effect of each identified risk on the overall project objectives and deliverables.
Which step in composite risk management is adtp-tl used?
ADTPTL is a protocol that is used during the Identify Hazards phase of composite risk management.
Does standard deviation measure systematic or unsystematic risk?
Standard deviation is a measure of total risk, or both systematic and unsystematic risk. Unsystematic risk can be diversified away, systematic risk cannot and is measured as Beta.
Can bond ratings be used as a measure of the bond's risk?
Yes OR true
How do you measure the risk of a single asset?
The total risk of a single asset is measured by the standard deviation of return on asset. Standard deviation is the square root of variance. To measure variance, you must have some distribution/ possibility of asset returns. However, the relevant risk of a single asset is the systematic risk, not the total risk. Systematic risk is the risk that cannot be diversified away in a portfolio. Systematic risk of an asset is measured by the Beta. Beta can be found using Regression (between market return and asset's return) or Covariance formula.
Is it correct that Sensitivity is the an absolute measure of risk?
Sensitivity is the an absolute measure of risk
What is the instrument used to measure distance in a car?
The instrument used to measure the total distance that a car has traveled is called an odometer.
The nurse explains to the uap that the braden scale is used to measure which client parameter?
Risk for pressure sores
What does TRACS stand for?
The Total Risk Assessment and Control System used for ORM assessments
How should the measure of risk of an asset be interpreted?
Risk is necessary in the investment world. The absolute measure of risk is the standard deviation which is a statistical measure of dispersion. The distribution curve shows how much an asset can deviate from its expected outcome.
The portion of total risk that remains after unacceptable risk has been determined is .?
total
How do you measure risk within a firm?
You can measure risk by calculating the risk associated with each project the company decides to take on. A company will generally balance their risks with their expected returns.
What does the acronym TRACS stand for?
The Total Risk Assessment and Control System used for ORM assessments.
Difference in Relative risk and risk ratio?
There is no difference between the two. Relative risk is the same as relative ratio. Commonly abbreviated as RR, relative risk/ratio is measure of absolute risk in one population as a proportion of absolute risk in another. It is a measure of the strength of association.
