Explain the difference in the two main measures of risk: the standard deviation and the beta
What will be an ideal response?
Answer: It is best to use the standard deviation when describing the risk of an isolated stock or even a portfolio that is not well-diversified. It is best to use the beta of a stock to describe its risk when it is not isolated but is instead a part of a well-diversified portfolio. When it is mixed with other stocks, its fluctuations will cancel out some of the other stocks' fluctuations, thereby reducing the overall volatility of the portfolio. So a stock that looks risky by itself may very well make your portfolio safer, depending on its correlation with all the other stocks in your portfolio.
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A) social media B) buzz marketing C) public relations campaigns D) network television advertising E) integrated marketing communications
The current yield on a bond is a good approximation of the bond's yield to maturity when the bond matures in five years or less and its price differs from its par value by a large amount
Indicate whether the statement is true or false