{"id":54208,"date":"2024-04-16T00:06:16","date_gmt":"2024-04-16T00:06:16","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=54208"},"modified":"2024-04-16T00:06:16","modified_gmt":"2024-04-16T00:06:16","slug":"relationship-between-total-risk-of-stock-diversifiable-risk-and-market-risk-is-classified-as","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/relationship-between-total-risk-of-stock-diversifiable-risk-and-market-risk-is-classified-as\/","title":{"rendered":"Relationship between total risk of stock, diversifiable risk and market risk is classified as"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;total risk&#8221; option2=&#8221;standard deviation&#8221; option3=&#8221;standard alpha&#8221; option4=&#8221;treynor alpha&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. total risk.<\/p>\n<p>Total risk is the sum of diversifiable risk and market risk. Diversifiable risk is the risk that can be eliminated by diversification, while market risk is the risk that cannot be eliminated by diversification.<\/p>\n<p>Standard deviation is a measure of volatility, which is the tendency of a security&#8217;s price to fluctuate. Standard alpha is a measure of the performance of a security relative to a benchmark, while Treynor alpha is a measure of the performance of a security relative to the market.<\/p>\n<p>Here is a more detailed explanation of each option:<\/p>\n<ul>\n<li><strong>A. Total risk<\/strong> is the sum of diversifiable risk and market risk. Diversifiable risk is the risk that can be eliminated by diversification, while market risk is the risk that cannot be eliminated by diversification.<\/li>\n<li><strong>B. Standard deviation<\/strong> is a measure of volatility, which is the tendency of a security&#8217;s price to fluctuate.<\/li>\n<li><strong>C. Standard alpha<\/strong> is a measure of the performance of a security relative to a benchmark.<\/li>\n<li><strong>D. Treynor alpha<\/strong> is a measure of the performance of a security relative to the market.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;total risk&#8221; option2=&#8221;standard deviation&#8221; option3=&#8221;standard alpha&#8221; option4=&#8221;treynor alpha&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-54208","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Relationship between total risk of stock, diversifiable risk and market risk is classified as<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/relationship-between-total-risk-of-stock-diversifiable-risk-and-market-risk-is-classified-as\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Relationship between total risk of stock, diversifiable risk and market risk is classified as\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;total risk&#8221; 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